Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKERin the Chair]

PRIVATE BUSINESS

CITY OF LONDON (VARIOUS POWERS) (No. 2) BILL

BRITISH RAILWAYS BILL

BRITISH RAILWAYS (MERSEY RAILWAY EXTENSIONS) BILL

Lords Amendments considered and agreed to.

MEDWAY WATER (BEWL BRIDGE RESERVOIR) BILL [Lords]

PORT OF LONDON BILL [Lords]

[Queen's Consent, on behalf of the Crown, signified]

Read the Third time and passed, with Amendments.

MERSEY DOCKS AND HARBOUR BOARD BILL [Lords]

[Queen's Consent, on behalf of the Crown, signified]

Read the Third time and passed without Amendment.

MID-GLAMORGAN WATER BILL [Lords]

Read the Third time and passed, with Amendments.

GREATER LONDON (VAUXHALL CROSS IMPROVEMENT) BILL [Lords]

As amended, considered;

Standing Order 205 (Notice of Third Reading) suspended.—[The Deputy Chairman of Ways and Means.] [Queen's Consent, on behalf of the Crown and the Duchy of Cornwall, signified.]

Bill accordingly read the Third time, and passed, with Amendments.

LANCASHIRE COUNTY COUNCIL (GENERAL POWERS) BILL [Lords]

As amended, considered;

Standing Order 205 (Notice of Third Reading) suspended.—[The Deputy Chairman of Ways and Means.] [Queen's Consent, on behalf of the Crown and the Duchy of Lancaster, signified.]

Bill accordingly read the Third time, and passed, with Amendments.

FOREMEN AND STAFF MUTUAL BENEFIT SOCIETY (APPLICATION OF RULES) ETC. (No. 2) BILL (By Order)

Second Reading deferred till Tuesday, 15th October.

Oral Answers to Questions — LOCAL GOVERNMENT

Historic Buildings Council (Town Schemes)

Dr. Gray: asked the Minister of Housing and Local Government if he will make a statement on the numbers of town schemes under the Historic Buildings Council now in operation or planned.

The Minister of State, Ministry of Housing and Local Government (Mr. Niall MacDermot): Eight schemes are in operation. Arrangements are nearing completion for a further five, and seven, others are under discussion. I will, with permission, circulate a fuller statement in the OFFICIAL REPORT, naming the towns and giving details of the allocation of grant.

Dr. Gray: I congratulate my hon. and learned Friend on what is being done, but will he say whether the ancient town of Great Yarmouth has a scheme, and also whether there is a scheme for the City of Norwich?

Mr. MacDermot: No, neither of those towns is on the list. It is open to any town with a historic area or a number of historic buildings to apply for a town scheme, which will then be considered by the Historic Buildings Council.

Following is the information:

TOWN SCHEMES


1.Schemes in operation



Annual Allocation by Minister
Minister
Percentage of costs payable Local Authority
Owner



£





Bath
…
…
10,000
50
25 (County Borough)
25


Bradford on Avon, Wilts.
2,000
25
25 (County and U.D.C. jointly)
50


Brighton
…
…
1,000
(Equal parts Minister and County Borough)
Various


Cheltenham
…
…
5,000
25
25 (County and Borough Council jointly)
50


Faversham, Kent
…
…
500
25
25 (Borough Council)
50


Harwich
…
…
2,000
16·⅔
83·⅓ (All buildings owned by Borough Council)
—


Winchester
…
…
4,000
25
25 (County and City Council jointly)
50


York
…
…
7,500
25
25 (County Borough)
50





32,000





2.Schemes where arrangements are nearing completion


Berwick upon Tweed (County and Borough Councils).


Bewdley (County and Borough Councils).


Leamington Spa (Borough Council).


Salisbury (County and City Councils).


Stamford (County and Borough Councils).


3.Schemes under discussion


Abingdon (County and Borough Councils).


Bocking, Essex (County and Urban District Councils with co-operation of Civic Society).


Chatham (Borough Council—and possibly Civic Trust).


King's Lynn: Revival of earlier scheme (County and Borough Councils).


Lincoln (County Borough Council).


Shepton Mallet, Somerset (the U.D.C).


Thaxted, Essex (County Council and Dunmow R.D.C.).

Areas of Natural Beauty (Designation Orders)

Mr. W. O. J. Robinson: asked the Minister of Housing and Local Government how many orders designating areas of outstanding natural beauty he has confirmed within the last 12 months; and how many are at present under consideration by the National Parks Commission.

Mr. MacDermot: My right hon. Friend has confirmed three, relating to the Hampshire Coast, the Norfolk Coast and the Kent Downs.
The National Parks Commission is preparing three orders designating the North Wessex Downs, the Suffolk Coast and Heaths, and Dedham Vale and has

several others at an early stage of consideration.

Mr. Robinson: My hon. and learned Friend is to be congratulated on the progress already made in this important matter, but may we hope that the impetus will be stepped up in the future?

Mr. MacDermot: Yes, Sir. The Commission is keeping this matter actively under consideration. The statutory provisions are thorough and, in consequence, somewhat lengthy.

Sir Knox Cunningham: Cannot the Minister do something to prevent areas of beauty being covered by gigantic electricity pylons?

Mr. MacDermot: That is another question. There are procedures for considering that matter as well.

Land Commission (Compulsory Purchase Powers)

Mr. Rossi: asked the Minister of Housing and Local Government whether he is aware that developers are continuing to threaten individual property owners with the compulsory purchase powers of the Land Commission; and whether he will take steps to stop this practice

Mr. Ronald Bell: asked the Minister of Housing and Local Government what action he will now take to prevent such misuse of the name and powers of compulsory purchase of the Land Commission as are now commonly taking place and resemble the one recently sent to him by the hon. and learned Member for South Buckinghamshire.

Mr. MacDermot: A few cases only have been reported. Any owners threatened in this way should report the facts immediately to the regional office of the Commission.

Mr. Rossi: Does not the Minister deplore the use of an Act as an instrument for blackmail? Does not he consider that this strengthens the case against the extension of the Government's powers by the introduction of the second appointed day? Will he defer that day indefinitely?

Mr. MacDermot: There is no present intention to introduce the second appointed day. I do not see how that question arises on this matter. I have already deplored the isolated instances of the practice to which the Questions refer, and the Commission will ask professional bodies to make it clear to builders and developers that statements should not be made implying that the Commission's compulsory purchase powers will, or may, be used against particular owners.

Mr. Bell: Does not the Minister know that the Act, which was intended to be directed against land speculators, is becoming a weapon of oppression in their hands, and that property owners are being bullied even to part with their back gardens by this kind of thing? What remedy will he or the Land Commission have if professional bodies take no notice of the warning he has just described?

Mr. MacDermot: I do not agree that the Act is becoming an instrument of oppression. One of the functions of the Land Commission is to prevent land hoarding, and it has compulsory purchase powers which can be used for the assistance of the private builder and to ensure that land is brought forward for development. That is perfectly proper. It is not proper for a builder to suggest that he has some way of inducing the Land Commission to use the powers in a particular case. This is a matter for decision by the Commission.

Trade Effluent (Disposal)

Mr. Wall: asked the Minister of Housing and Local Government if he will now take steps to facilitate the co-operation between industry and local government in the development of joint schemes for the disposal of trade effluent.

The Minister of Housing and Local Government (Mr. Anthony Greenwood): Many sewerage authorities already consult local industry when they are planning new or extended disposal works to deal with voluminous or difficult trade waste, and I have urged in a recent circular that this should be the general practice.

Mr. Wall: Does not the right hon. Gentleman agree that the present situation, in which industry gets grants for this purpose and local authorities do not, is absurd? Would not a joint scheme prove more economic? Should not that attract some form of grant?

Mr. Greenwood: I do not think that a joint scheme is the way to deal with the problem. Ownership of sewage disposal works must be under one body and not a joint undertaking of the kind the hon. Gentleman suggests. But I appreciate the interest he takes in this problem.

Alkali Inspectorate

Mr. Murray: asked the Minister of Housing and Local Government what instructions have been given to the Alkali Inspectorate regarding co-operation with local authorities; whether he is satisfied that local authorities are sufficiently aware of the advisory services available to them; and if he will make a statement.

Mr. Greenwood: Co-operation between the Alkali Inspectorate and local authorities is most important. Alkali inspectors make two visits annually to each local


authority whose area includes works registered under the Alkali Act. They visit on request any authority seeking advice upon an air pollution problem outside the scope of the Act. I have no reason to suppose that local authorities who need the Inspectors' services are unaware of them, but I will glady investigate any cases my hon. Friend has in mind.

Mr. Murray: I thank my right hon. Friend for that reply, but will he give much greater publicity to these services? Is he aware that, although local authorities might not always complain, residents around places like cement works face great difficulty and discomfort because of the fall-out?

Mr. Greenwood: I sympathise with the point put by my hon. Friend. But, of course, residents ought really to bring pressure on their local authorities. In relation to the publicity angle, I am happy to be able to tell my hon. Friend that the Chief Inspector's Report for 1967 has been laid before the House today. I hope that it will be studied by hon. Members and will receive adequate publicity in the Press.

Mr. Julius Silvennan: Does my right hon. Friend accept that there is a good deal of conflict as well as overlapping between the work of these two authorities? Will he consider introducing legislation in the near future to put the work of smoke control and the control of alkali emission under one authority, either the local authority or some other?

Mr. Greenwood: My hon. Friend has wide experience of these matters. If he will give me information about the overlapping to which he refers and the difficulties to which he believes this gives rise, I will gladly look into the point.

Householders (Multi-Storey Garages)

Mr. Worsley: asked the Minister of Housing and Local Government what steps he is taking to encourage garaging associations by means of which house-owners in cities can co-operate in the provision of multi-storey garages for their own use.

Mr. MacDermot: None, Sir. Perhaps the hon. Member would care to let me

have fuller details of what he has in mind.

Mr. Worsley: I thank the hon. and learned Gentleman for that reply and I will take him up on it. Is he aware that there is great advantage to be gained by off-street parking? Will the Department do what it can to help?

Mr. MacDermot: If, by that, the hon. Gentleman means financial assistance for private parking, then I foresee difficulties. But, of course, we realise the importance of trying to use planning and other procedures to facilitate parking arrangements.

Land Commission (Midlands Division)

Sir G. Nabarro: asked the Minister of Housing and Local Government if, in view of the few land acquisitions and attenuated operations of the Midlands Division of the Land Commission, he will state what economies and operational advantages are to be achieved by amalgamating the division with the adjoining divisions with a view to abolition by 1970.

Mr. MacDermot: No operational advantages would be gained by amalgamation of the West Midlands with other regions.
The acquisition programme in the region is building up. Four draft compulsory purchase orders relating to 325 acres have now been published and the region is investigating further sites extending to over 6,000 acres.

Sir G. Nabarro: Is not the hon. Gentleman aware that the Midlands Division is a quiescent, slumbering body grossly under-employed? In the interests of Government policy for increasing productivity at every level, notably in bureaucracy, would not amalgamation as a precursor to extinction be the proper recourse?

Mr. MacDermot: No, Sir. The hon. Gentleman's description is quite inaccurate. Perhaps he would like to visit the offices some time and see for himself.

Mr. Molloy: In order to bring some sense into this discussion, will my hon. and learned Friend tell us how much land the Commission has acquired?

Mr. MacDermot: So far, 28 sites totallying over 1,100 acres have been acquired or are subject to exchange contract or draft or confirmed compulsory purchase orders.

Land, North Worcestershire (Development)

Mr. Dance: asked the Minister of Housing and Local Government what is the present position regarding Birmingham Corporation's applications to develop land in North Worcestershire; and if he will make a statement.

Mr. MacDermot: I understand that Birmingham City Council and Worcestershire County Council have recently agreed on sites to take 11,000 houses on the Worcestershire boundaries of Birmingham in the Frankley-Rubery and Hawkesley-Moundsley areas: and that applications for these will shortly be made by the Birmingham City Council.

Mr. Dance: I thank the hon. and learned Gentleman for that reply. Will he give me an assurance that the cost of the services resulting from this development will be borne by the City of Birmingham and not by the ratepayers of Worcestershire?

Mr. MacDermot: We had better await the application and what is said about it.

Land Commission Act (Schedule 5)

Mr. Neave: asked the Minister of Housing and Local Government whether he will seek to amend Schedule 5 of the Land Commission Act during the current Session of Parliament.

Mr. MacDermot: No, Sir. It was not found possible to include an amendment in this year's Finance Bill.

Mr. Neave: As the Minister has already had to make two extra-statutory concessions to people of small means who have suffered hardship, why cannot this matter be rectified by legislation without delay?

Mr. MacDermot: The fact that the original concession has been extended, as is reported in this morning's Press, shows that there has been no disadvantage in the slight delay in legislation. No one suffers from it. The fact that the concession is in operation as an extra-statutory concession has been reported to the Public Accounts Committee.

Mr. Rippon: Is the Minister of State aware that there is great anxiety on this point and that we should like to have amending legislation as soon as possible, at any rate before we repeal the Act altogether? For the avoidance of all doubt, will he confirm that the concession announced yesterday contradicts and overrides his reply of 7th May, which indicated that the concession would not apply to non-residential land?

Mr. MacDermot: I do not know about contradicting it. The original reply was correct. The original concession did not apply to non-residential land. The extension is that it now applies to non-residential land to the extent indicated.

Piccadilly Circus (Redevelopment)

Mr. Wall: asked the Minister of Housing and Local Government when he estimates the redevelopment of Piccadilly Circus will be completed; and if he will make a statement.

Mr. MacDermot: I cannot forecast a completion date. The proposals are still in their formative stage and have been published now to obtain public reaction to them.

Mr. Wall: Would not the hon. and learned Gentleman agree that the present condition of the hub of the Commonwealth is a disgrace? Will he do his best to see that this is the last of a long series of plans and that redevelopment starts as soon as possible?

Mr. MacDermot: If I were to affirm that, I should be giving a blessing to a plan which had not even been submitted to the Ministry, and obviously I cannot do so. I agree with the hon. Gentleman's first comment.

New and Expanded Towns

Mr. W. O. J. Robinson: asked the Minister of Housing and Local Government what progress he has made during the last year with the major schemes for new and expanded towns under the New Towns Act.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): Since last July my right hon. Friend has designated three new towns, Peterborough, Northampton and Warring-ton. Public inquiries into objections


to the Dawley-Wellington-Oaken-gates and Ipswich new town proposals have been held, and my right hon. Friend awaits the inspectors' report. He is considering the consultants' study of the proposed Central Lancashire new town and its impact on North-East Lancashire. In addition, Milton Keynes new town was designated in January, 1967.

Mr. Robinson: As so many local authorities can look only to new and expanded towns for the solution of their housing problems, may I ask my hon. Friend to endeavour to improve on the splendid record of the Government in respect of new towns?

Mr. MacColl: We have started a whole new generation of new towns, with new and varied ideas of how to use the machinery. This is a very valuable experiment with which we want to push ahead as quickly as possible.

Oil Pollution

Dr. Gray: asked the Minister of Housing and Local Government what steps he has taken recently to help local authorities to deal with oil pollution.

Mr. Loveys: asked the Minister of Housing and Local Government whether he will make a statement giving details of his recent circular issued to local authorities concerning grants for clearing oil pollution from the beaches.

Mr. Greenwood: I am sending my hon. Friend and the hon. Member copies of a circular and technical manual sent to all coastal local authorities on 8th July. Copies are also available in the Library. The circular asks county and county borough councils to make schemes for mutual aid; describes arrangements for help from the Armed Services; and says that, pending legislation, the Department will consider applications for a 50 per cent. grant towards the cost of clearance and provision of equipment.

Dr. Gray: I congratulate my right hon. Friend on the steps already taken. Will he say what plans he has for an early warning system to be carried out by fast motor boats, helicopters or in other ways, so that local authorities can be warned in sufficient time that oil pollution is about to take place?

Mr. Greenwood: I have great sympathy with what my hon. Friend wants, but an early warning system on the scale which he envisages would involve quite disproportionate expense. We do have an early warning system, and I hope that this will be made even more efficient under the new arrangements which I have proposed in the circular.

Mr. Loveys: While appreciating that the new 50 per cent. grant to be allowed by the Minister will certainly be of help, may I ask the right hon. Gentleman to consider, as local authorities are in no way responsible for the unfortunate occurrence of oil pollution on their beaches, that the grant should be for the full 100 per cent. of the cost of clearance?

Mr. Greenwood: I have given great attention to the point which the hon. Gentleman raises, because I can understand the attitude of the coastal authorities. I have come to the conclusion that 50 per cent. of the admissible expenditure by the ratepayers and 50 per cent. by the taxpayer is a fair distribution of the burden.

Mr. Peter Mills: Will the Minister bear in mind the very real worry and concern that many authorities in the South-West have over the transfer of oil from tanker to tanker in Torbay? Is he aware that the result of an accident here could have the most disastrous effects on the South-West beaches?

Mr. Greenwood: I appreciate the anxieties to which the hon. Gentleman has rightly called our attention. Our best advice at present is that the danger is minimal, but we are keeping the situation under review, and so are the oil companies concerned.

Dr. John Dunwoody: While thanking my right hon. Friend for the work that he and his Department have done in this area over the last year or two, may I impress upon him that there is a very real problem being faced by the small local authorities in tourist areas through oil pollution? Can he look into the possibility of giving them a little more early warning than they get at present?

Mr. Greenwood: I am grateful to my hon. Friend for what he has said. I will certainly look at the possibility of improving the early warning system, but I am pretty confident that this is one of the


results which will flow from the new proposals we are making to local authorities as to mutual help.

Oral Answers to Questions — HOUSING

House Prices

Mr. Murton: asked the Minister of Housing and Local Government whether he has now revised his estimate of the increase in house prices that will take place in 1968.

Mr. MacColl: I would refer the hon. Member to the reply given to my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) on 9th July.—[Vol. 768, c.43.]

Mr. Murton: I understand that that reply told us that costs would rise by 1½ per cent. Does not the hon. Gentleman think that an increase in house prices of 1·1 per cent. already in the first quarter of this year plus the effect of another 1 per cent. when the new rates of Selective Employment Tax come in in September will make a much higher estimate possible by the end of the year?

Mr. MacColl: In that last Answer I corrected an estimate of 4½ per cent. to about 3 per cent. I have no evidence at present that new house prices are rising at that rate.

Mr. Rippon: But what evidence is the Minister obtaining and what efforts is he making to find out the facts? Is not he aware that many people consider that house prices will rise by about 10 per cent. this year?

Mr. MacColl: That is a wild estimate. I prefer to stick to the evidence which we have rather than speculate.

Improvement Grants

Mr. Graham Page: asked the Minister of Housing and Local Government what estimate he has made of the number of improvement grants to be approved in 1968 as compared with 1967.

Mr. MacColl: One hundred and thirteen thousand grants were approved in England and Wales in 1967, of which nearly 45,000 were approved in the first five months. The corresponding figure

for January to May, 1968, was nearly 50,000 but I am not yet in a position to make an estimate for 1968 as a whole.

Mr. Page: Is the hon. Gentleman aware that the number in 1967 was very much less than in 1964–65? Does not he think that there is a danger at present that applications will be held back pending the legislation which the Government have in mind? Can anything be done about that to bring the applications forward now? When will the new grants become available under that new legislation?

Mr. MacColl: It is because we were unhappy about the rate at which improvement grants were coming in that we propose this very great new change of the machine. A great many improvements can be done under the existing legislation. What the change does is to extend the costs within which grants are available. For many people it is wise to go ahead now, though some might benefit by waiting to see whether they can get an area grant. I cannot say when the legislation will be introduced, but I hope that it will be soon.

Mr. Julius Silverman: How many of the houses improved are owner-occupied, and how many are tenanted?

Mr. MacColl: If my hon. Friend wants an accurate figure, perhaps he will put down a Question and then I shall give him the latest.

Private House Building

Mr. Allason: asked the Minister of Housing and Local Government how many houses he estimates will be completed in the private sector in 1968 and 1969.

Mr. Greenwood: It is not possible to make precise predictions for the private sector for as far ahead as the hon. Member asks. In the current year, however, I expect that over 200,000 private houses will be built in Great Britain.

Mr. Allason: Is not it time the Minister encouraged private enterprise to get on with building houses? Does he recall that 218,000 houses were built in the private sector in 1964, and that in 1964 his party promised more building of private houses?

Mr. Greenwood: We have already done a great deal to encourage the building of private houses. I shall be only too happy to expatiate on this subject later if I have the good fortune to catch the eye of the Chair.

Mr. Blenkinsop: Is my right hon. Friend aware of the great feeling of satisfaction on this side of the House at the considerable increase in total house building? That is what we are really concerned about.

Option Mortgage Scheme

Mr. Clegg: asked the Minister of Housing and Local Government what plans he has for revising the publication, "Your Guide to the Option Mortgage Scheme".

Mr. MacColl: Now that it is no longer necessary to include advice to existing borrowers, it should be possible to simplify the booklet, and my right hon. Friend has put in hand the preparation of a revised version.

Mr. Clegg: I am grateful to the Minister for that reply, but would he get on with the job as quickly as possible and include in the new pamphlet the effect of family allowances as given in the Finance Bill?

Mr. MacColl: The form of the booklet does not involve explaining the details of Inland Revenue legislation, but we shall certainly include a warning that people should look ahead for possible tax changes.

Mr. Rippon: Will it go further and warn people that as a result of the record level of interest rates it will now be very unwise to enter the mortgage option scheme without taking a great deal of advice?

Mr. MacColl: I am sorry if the right hon. and learned Gentleman seeks to underestimate the value of what has been a great improvement for very many people. All through the existing booklet we emphasised the importance of people considering very carefully before exercising their option.

Mr. Rossi: asked the Minister of Housing and Local Government whether he will take steps to raise the maximum Value figure in the London area for

houses falling within the 100 per cent. mortgage guarantee scheme.

Mr. MacColl: No, Sir. It is too soon to contemplate any revision.

Mr. Rossi: Is the hon. Gentleman aware that, according to the figures published by the Co-operative Permanent Building Society for the last quarter of 1967, the average price of a new house in Greater London and the South-East was £5,482 in comparison with an average for the rest of the country of £4,351? Would not he agree that this places Greater London and the South-East in an unfavourable position because the scheme applies only to houses of under £5,000 in value?

Mr. MacColl: The hon. Gentleman is talking about average prices. The scheme is intended to help people of moderate means who normally would not be in the market at average prices or over but would be interested in cheap houses.

Council House Rents

Mr. Clegg: asked the Minister of Housing and Local Government whether he has accepted the recommendations in Command Paper No. 3604 concerning the rents of council houses.

Mr. Greenwood: The Government have already taken powers in the Prices and Incomes Act, 1968, to secure the limitation and phasing of rent increases, and to enable service of notice of increases without notice to quit, and we have commended to local authorities the recommendations of the National Board for Prices and Incomes concerning improved arrangements for dealing with complaints from tenants and for consultation with tenants' organisations. The Government will not reach any final conclusions on the other major recommendations of the Board until current consultations with the local authority associations are completed.

Mr. Clegg: Is the right hon. Gentleman giving careful consideration to the recommendation that council rents should ultimately be based on replacement cost?

Mr. Greenwood: That matter is one of the points dealt with by the National Board for Prices and Incomes, and it


is one of the subjects of consultation with tile local authority associations.

Mr. Macdonald: Does not my right hon. Friend agree that the recommendations in the document merely tinker with the problem, and that the only effective way to reduce rents is to achieve a reduction in interest rates? What further plans has he in this connection?

Mr. Greenwood: The question of interest rates will be discussed later. In the case of new houses, we have done a great deal to reduce the interest paid by local authorities, but I have not at present any proposals for increasing the subsidy to the existing housing stock.

Sir G. Nabarro: In reference to the last supplementary question from behind the right hon. Gentleman, may I ask whether he is aware that this morning for the first time an advertisement by a building society has appeared offering 8½ per cent. for deposits, a record level in history?

Mr. Heffer: Is my right hon. Friend aware that certain local authorities, usually Conservative-controlled, have been interpreting the 7s. 6d. as an increase that they can put on every year? Will he make it perfectly clear to the House and the country that that is not the Government's intention? I hope that a circular along those lines will go out.

Mr. Greenwood: I am very grateful to my hon. Friend for making that point. The powers are limited in duration under the Act, but I have made it clear to local authorities that the 7s. 6d. is a ceiling and is not to be regarded as a norm. I am in correspondence with a large number of local authorities on this subject.

Sir G. Nabarro: asked the Minister of Housing and Local Government how many local authorities and representing how many council houses, have to date adopted his proposal of a 7s. 6d. per week increase in rents for each of three successive years; how much above the 3½ per cent. norm of prices and incomes policy this represents; and whether it is his policy that private landlords should now do the same, at 7s. 6d. per week

increase per domestic hereditament, for each of three years, in the interests of equity.

Mr. Greenwood: I have not proposed any increase. On 3rd May I advised local authorities that I should not normally accept in any one year average increases in standard rents which exceed 7s. 6d. a week; and since then the 47 proposals I have received have all been within this limit. I have emphasised that this is an upper limit and not a norm. A private landlord is entitled to increase a regulated rent up to the fair rent subject to the phasing arrangements I have recently made.

Sir G. Nabarro: Will the right hon. Gentleman now apply himself to answering my Question? What relation is there between the 7s. 6d. per week for each of three consecutive years and the 3½ per cent. norm of the Government under the prices and incomes policy? Secondly, will he advise rent tribunals that private landlords, in equity, should be placed in the same position as councils as landlords?

Mr. Greenwood: In the Question on the Order Paper, the hon. Gentleman asked a number of points, one of which related to an increase which he alleged me to have recommended and which I had not recommended. So far as the relationship between the increase and the 3½ per cent. norm on prices and incomes is concerned, I do not think this is a parallel. I do not think that an increase in total income can be compared with an increase in one item of expenditure, however important that is. But I hope that the hon. Gentleman will remember that the Prices and Incomes Board recommended a maximum average increase and not a percentage. On the second point raised by the hon. Gentleman, perhaps he will study the guidance I have recently issued about the phasing of increases in the private sector.

Mr. Ogden: Will my right hon. Friend clarify his earlier statement that 7s. 6d. is the ceiling for any increase? Does it mean that this is a ceiling for average increases but that some increases might be allowed of up to 10s.? When will he be able to use some of the powers given to him in the Prices and Incomes Act, 1968?

Mr. Greenwood: I repeat that I have advised local authorities that I should not normally accept in any one year average increases in standard rents of more than 7s. 6d. per week. I have also said that I would not in normal circumstances accept individual increases of more than 10s. a week. There are later Questions on the Order Paper about my powers.

Mr. Bessell: Has the right hon. Gentleman any evidence of hardship being caused to council house tenants in consequence of these increases?

Mr. Greenwood: I think that any increases must cause some hardship and inconvenience. Our aim is to keep them to the minimum. That is what we are seeking to do through this legislation and the circular I have issued. If the hon. Gentleman has any experience of local authorities operating a rent policy which appears to inflict injustice, I would gladly look into such cases if he brings them to my attention.

Mr. Lipton: Is my right hon. Friend aware that the G.L.C., under Tory control, is going right through the 7s. 6d. ceiling by imposing substantial increases in ancillary charges upon council house tenants in G.L.C. flats?

Mr. Greenwood: Any increases of that kind must be limited to actual increases in costs. I would rather not become involved in discussion of individual cases. I hope my hon. Friend will bear in mind, however, that, as a result of my intervention, the G.L.C. has mitigated its proposed increases very considerably.

Mr. R. C. Mitchell: asked the Minister of Housing and Local Government how many local authorities have moderated rent increases, or proposed increases, since the issue of Circular 25/68.

Mr. Greenwood: Twenty-six local authorities have moderated increases of rent, actual or proposed which had been notified to the Ministry before Circular 25/68 was issued.

Mr. Mitchell: Is my right hon. Friend satisfied that the circular is having the desired effect?

Mr. Greenwood: I think that the circular is having an effect in two ways. First, it is tending to make local autho-

rities now contemplating increases keep them within the limits. Secondly, it has had a profound effect in the case of these 26. In nine cases modifications to rent increases which would have come into effect after the circular are involved and in the other 17 rent reductions to mitigate rent increases which came into effect after the circular are involved, so I think that we are making useful progress.

Mr. Boyd-Carpenter: As the intervention of the Government in the affairs of freely elected local authorities will involve substantial rate increases, will not the Government compensate the ratepayers of these areas for the financial consequences of the Government's own intervention?

Mr. Greenwood: I have answered that question before. The answer is "No". We have suggested various other considerations which local authorities should take into account. Local authorities cannot be specifically protected against legislation, any more than can corporations or private individuals.

Housing Target

Mr. Frank Allaun: asked the Minister of Housing and Local Government if he will give an undertaking that there will be no further reduction in the 500,000 a year housing target because of increased activity in improving old houses.

Mr. Greenwood: The Government's policy of allotting a greater share of public investment in housing to improvement of older houses was set out in the White Paper "Old Houses into New Homes". I expect new housebuilding to continue at a very high level into the 1970s.

Mr. Allaun: That is not very definite. Does my right hon. Friend agree that housing need is so great that we need 500,000 new houses and 200,000 improvements a year, and would it not be unacceptable to do one at the expense of the other?

Mr. Greenwood: Our overall policy was laid down in the White Paper. Local authorities must have some flexibility in the way in which they determine priorities of expenditure. The need for new housing is very great; the need for improvement of old houses is also great. My


general aim is to make the greatest contribution each year to the solution of the housing problem which our economic situation permits.

Mr. Rippon: Will the right hon. Gentleman make it clear to his hon. Friend that the figure of 500,000 was not a target, that it was a pledge, not a lightly given promise, according to the Prime Minister, to build 500,000 houses a year in 1970, no matter what circumstances might arise, that it was a pledge reaffirmed in the House in 1966 and that it has since been abandoned? Will he explain to his hon. Friend that no one would take any notice of a pledge, much less a lightly given promise, on this subject given by Her Majesty's Government?

Mr. Greenwood: This must be the seventh or eighth time that the right hon. and learned Gentleman has made this point. The whole House knows the reasons, following devaluation, why the target of 500,000 had to be abandoned. The fact remains that we have built substantially more houses than right hon. Gentlemen opposite ever built.

House Improvements

Mr. Frank Allaun: asked the Minister of Housing and Local Government if, following the publication of the White Paper, Old Houses into New Homes, and in order to avoid slowing down still further the improvement of these houses, he will include in the subsequent legislation to be introduced the compulsory powers to make property owners install baths, hot water and inside water closets which have been omitted from the White Paper.

Mr. MacColl: It is generally agreed that the existing compulsory powers have not worked well, and the White Paper proposes a policy relying mainly on persuasion, with compulsory purchase as a reserve power. My right hon. Friend will of course be very pleased to consider any suggestions my hon. Friend wishes to make.

Mr. Allaun: Is the Parliamentary Secretary aware that the Public Health Inspectors Association, a body of practical experts, is very concerned that the White Paper proposes to repeal existing powers rather than to streamline them?

As many councils, particularly those now Conservative-controlled, would refuse compulsory purchase, would it not be better to have compulsory purchase and the existing machinery invoked?

Mr. MacColl: The suggestions of the public health inspectors, who were very constructive and helpful, will be considered by my right hon. Friend before legislation is prepared, but the evidence is that attempts to force through improvements against active obstruction have not worked. It has been a long and tedious operation and, in this situation, it is best to go for compulsory purchase.

Dispossessed Owners (Compensation Payments)

Mr. Archer: asked the Minister of Housing and Local Government whether he will seek powers to control the practice of some local authorities of reducing the sum payable to owner-occupiers upon the compulsory acquisition of their property when they are rehoused in council accommodation.

Mr. MacColl: The basis of compensation is laid down by statute and no person is obliged to accept less than the amount due on that basis: any dispute as to what this amount is in a particular case can be taken to the Lands Tribunal. My right hon. Friend will consider whether he can usefully send out advice to local authorities on this matter when he receives the report of the Housing Management Sub-Committee of the Central Housing Advisory Committee, which is considering this amongst other questions.

Mr. Archer: I thank my hon. Friend for the latter part of that Answer. Does he agree that if the private landlord were to exact key money in this way he would very properly face prosecution? Does he consider it right that a person of very moderate means should be deprived of a substantial part of his savings as a fee for the allocation of a council house?

Mr. MacColl: Broadly, I agree with my hon. Friend. However, I ought to point out that councils are not obliged to provide council houses for dispossessed owners if they are satisfied that suitable alternative accommodation is available privately.

Mr. Graham Page: Why does the Parliamentary Secretary have to wait for further information? Has it not become a scandal in some areas already that local authorities continue to engage in this practice, which is quite illegal?

Mr. MacColl: I do not think that it is illegal. The reason for waiting is that my right hon. Friend does not have evidence to show that the practice is widespread. It certainly exists in some areas, but I am sure that this Question and Answer will have discouraged local authorities from it.

New Towns (Ownership and Management)

Mr. Allason: asked the Minister of Housing and Local Government on what date Mr. Cullingworth was appointed to examine ownership and management of housing in new towns; and when his report is expected.

Mr. MacColl: Mr. Cullingworth was appointed in February, 1966. His report will be published towards the end of this year.

Mr. Allason: Is the Parliamentary Secretary satisfied with the speed of this report, remembering that it is of great importance to those who wish to become owner-occupiers in new towns? Is he not already aware that there is a gross imbalance in new towns and will he go ahead and start preparing his proposals to put right this imbalance?

Mr. MacColl: On the wider issue, my right hon. Friend has already indicated his wish that new towns should move towards a better balance of owner-occupation. A first draft of the Report was submitted in February, but Mr. Cullingworth asked to be allowed to do further work to polish it for publication. It is a very interesting report, well worth waiting for.

Mr. Newens: Before any action is taken to increase owner-occupation in the new towns, will my hon. Friend take account of the effect which will be produced by selling houses which were built some years ago at a comparatively low cost and putting the burden on the new rents of houses now being built?

Mr. MacColl: My right hon. Friend will take account of the economic and financial implications of all decisions.

Rent Assessment Committees, West Midlands

Mrs. Renée Short: asked the Minister of Housing and Local Government (1) if he is satisfied as to the manner in which the rent assessment committees in the West Midlands are carrying out their duties under the Rent Act; and if he will make a statement;
(2) what steps he is taking, in view of the fact that 70 per cent. of the decisions have led to rent increases, to ensure that rent assessment committees in the West Midlands pay proper regard to the reports of rent officers at hearings where landlords are represented by estate agents and solicitors.

Mr. MacColl: Rent assessment committees have before them the rent officers' reports, whether or not the parties appearing before them are professionally represented. In the great majority of cases they see for themselves the properties concerned.
In the West Midlands, out of 3,949 determinations by rent officers, 248 had been referred to and decided on by rent assessment committees up to 21st June. A total of 199 of these 248 decisions—80 per cent.—represented reductions of the rent before registration. The system seems to be functioning effectively.

Mrs. Short: Does my hon. Friend recall that one of the rent officers in the West Midlands recently sent him a long memorandum about the difficulties in the West Midlands? Is he aware that rent assessment committee apparently pay no regard to the level of rents already obtaining in an area, and they do not consult the register of rents when making assessments? Will my hon. Friend now carry out an investigation into the way in which the rent assessment committees in the West Midlands are operating?

Mr. MacColl: It is difficult to look at a particular case in isolation. The figures I gave in the Answer indicate that rent assessment committees in the West Midlands are bringing down the rents, below the rent before registration.

Mr. Graham Page: Would the hon. Gentleman look into the practice, in parts


of the West Midlands, of not calling the rent officer to give evidence before the rent assessment committee? It always seems a little peculiar that the person who really has the information should not be called to give evidence.

Mr. MacColl: This is rather wide of the Question. We look at this very carefully, and we have discussed it both with the rent officers and the presidents of panels. On balance opinion is against doing it.

LORD PRESIDENT OF THE COUN CIL (MINISTRY OF HEALTH RESPONSIBILITIES)

Mr. Maurice Macmillan: asked the Prime Minister what responsibilities the Lord President of the Council has or will have regarding the developments in the National Health Service described in the Ministry of Health's Green Paper.

The Prime Minister (Mr. Harold Wilson): The scope of my right hon. Friend's present responsibilities in relation to the Ministry of Health have already been announced, Sir, and I have no further information to give the House.

Mr. Macmillan: Will the Prime Minister accept that this amalgamation involves a unifying of the system of finance? Is it his intention that the Lord President should deal with the problem mentioned in the Green Paper, the double financing of the Health Service from taxes and health contributions on the one hand and rate support grants on the other?

The Prime Minister: My right hon. Friend is still going into the whole question of the basis on which the merger should be carried out, and it would be wrong for me to anticipate what his conclusions will be. Certainly all the relevant issues in the Green Paper, which are put forward for discussion and public debate, will be relevant to what he is doing.

Mr. Pavitt: Is my right hon. Friend aware that the very practical suggestions for integrating the Health Service contained in the Green Paper have been discussed for the last five years and that, irrespective of whether it is the Lord President or the Minister of Health, it would be a Cabinet decision? Will he

say that discussions will not continue for too long before a decision is made?

The Prime Minister: We deliberately decided that a matter so important, in a sense so human as this, should be published in this form so that there could be free public debate, without the Government having committed themselves to a given solution. The House will have seen the very forward-looking proposals my right hon. Friend the Minister of Health is putting before the House and the country.

Dr. Winstanley: Is the Prime Minister aware that we welcome the foreshadowing of the end of the damaging and divisive tripartite structure in the National Health Service, and we also welcome the Minister of Health's final conversion to the idea of area health boards, as first put forward by the Liberal Party seven years ago?

The Prime Minister: As I said, this is a Green Paper, not a White Paper, so the hon. Gentleman should not jump to conclusions with such rapidity. I am sure that he will have a very important contribution to make to the public debate on the Green Paper.

Dr. John Dunwoody: May I assure my right hon. Friend that it is particularly appropriate that this Report should come out at a time when we are considering the amalgamation of Ministerial responsibilities? Can we have a final decision on this Green Paper in the fairly near future?

The Prime Minister: Also relevant to the Green Paper and the merger is the publication of the Seebohm Report. The ultimate decision will also have to take into account the recommendations of the Maud Commission on Local Government.

GREECE

Mr. John Fraser: asked the Prime Minister what recent communications he has received from the Greek military régime regarding Her Majesty's Government's policy towards that régime; and what reply he has sent.

The Prime Minister: I would refer my hon. Friend to the Answer given on 8th July by my right hon. Friend the Minister of State for Foreign Affairs, to a


Question by the hon. Member for Louth (Sir C. Osborne).—[Vol. 768, c.6–7.]

Mr. Fraser: Would my right hon. Friend appreciate that whatever reaction any remarks of his might have provoked in Greece they have been widely welcomed by democrats in this country and throughout Europe? Secondly, would he make it clear, as the timetable for a restoration of democracy is coming to an end, that we shall soon have to start making moves inside N.A.T.O., in concert with our allies, to expel Greece if there is no restoration of democracy by the end of this year?

The Prime Minister: In answer to previous Questions by my hon. Friend I referred to the impatience with which everyone would be watching the attitude of the Greek Government to the timetable which they have promised. My hon. Friend will have noticed that the Greek Government have now, on timetable, produced a constitution. It would be inappropriate for me to comment on it, but it is a step in the right direction.

Mr. John Lee: Is it not the case that this is not a proper, adequate constitution? Will my right hon. Friend continue to consider the possibility of helping to get Greece expelled from N.A.T.O., bearing in mind that the ostensible reason for N.A.T.O.'s existence is the protection of democracy?

The Prime Minister: Our attitude to all these questions has been related to the fulfilment of the undertakings given by the Greek Government to get a speedy return to democracy on the basis of the democratic constitution to be approved by the Greek people. Since I last answered Questions on this subject, I think that there has been this step in the right direction.

Mr. Ian Lloyd: Would not the Prime Minister agree that there is a real danger, not only in Greece, but in other countries, of indulging the temptation of political condemnation and forgetting about the vital necessity of trade?

The Prime Minister: I thought that that matter was very satisfactorily dealt with by the answers given by my right hon. Friend the President of the Board of Trade when it was raised by hon. Members opposite two or three weeks ago.

MAJOR DEVELOPMENT PROJECTS (DEPARTMENTAL CO-ORDINATION)

Mr. G. Campbell: asked the Prime Minister what further measures he proposes for the co-ordination of departmental activities in order to obtain decisions without delay on major development projects such as aluminium smelters.

The Prime Minister: My right hon. Friends already work very closely together on these matters and no further measures of co-ordination are needed, Sir.

Mr. Campbell: Should not the many factors involved, including the E.F.T.A. considerations, have been examined before the announcement made last year? As this would have spared the areas concerned the anxiety and the confusion caused by repeated postponements of decisions, should not the Prime Minister have resisted the temptation to make the announcement of this project prematurely at his party conference.

The Prime Minister: The hon. Gentleman is quite wrong. The impatience at the delay should be assuaged in the next day or two when announcements are to be made. Very difficult negotiations with business firms are involved. There had to be a public announcement first to enable any firm which wanted to make an application to do so. These negotiations had to be related to the requirements of E.F.T.A. and of other international obligations, and it was essential in the negotiations to ensure that no financial arrangements were made which involved any question of subsidy. This has inevitably taken a very long time.

Mr. William Hamilton: Is my right hon. Friend aware that his imaginative announcement at about this time last year on the provision of aluminium smelters was widely appreciated, particularly in Scotland, and we are glad that it did not take him 13 years to make it?

The Prime Minister: In common with my hon. Friend, I am disappointed about the time which has been taken, but there have been the most difficult and involved negotiations with individual firms, and, as I say, some of the proposals put forward had to be turned down because of the international obligations involved.

Mr. Maudling: In the context of high energy consumption, can the Prime Minister confirm that, despite the White Paper, the coal industry will provide half the energy requirements of the country in the 1970s?

The Prime Minister: Yes—the right hon. Gentleman gives me the chance to say that, as is freely acknowledged in theFinancial Times this morning, the doubts thrown on this matter by the misreport-ing of my speech on Saturday were inaccurate. [Interruption.] I am not blaming anyone, but I am happy to say that theFinancial Times, which got it wrong yesterday, no doubt by inadvertence, got it right today once it heard, which hon. Members opposite have not heard, the tape recording of what I said.

COMMONWEALTH PRIME MINISTERS' MEETING

Sir Knox Cunningham: asked the Prime Minister what further progress has been made by the Commonwealth Secretary General towards calling a Commonwealth Prime Ministers' Conference; and if he will send an official invitation, before the House rises for the Summer adjournment, to all Commonwealth Prime Ministers asking them to attend an early meeting in London.

The Prime Minister: I would refer the hon. Member to the Answer I gave on 18th July to Questions by the hon. Member for Moray and Nairn (Mr. G. Campbell) and my hon. Friend the Member for Woolwich, West (Mr. Hamling).— [Vol. 768, c.271.]

Sir Knox Cunningham: I am glad to know that a date, even next year, has been found since my Question went on the Order Paper. Would the Prime Minister seek some urgent way of exercising Commonwealth pressure on the problem of Nigeria? As regards Rhodesia, will he again be in a position to tell his Commonwealth colleagues that punitive sanctions will succeed in weeks, not months?

The Prime Minister: The hon. and learned Gentleman can always be relied upon to denigrate any subject which he touches, including the Commonwealth. I am disappointed that the date of the conference is as late as it is, but we had

to reach a date which was acceptable to 25 Commonwealth Governments. We should have preferred it to have been held this autumn. I thought that the question of Nigeria was fully debated by the House yesterday when two very full Statements were made by my right hon. Friend the Secretary of State for Commonwealth Affairs. On Rhodesia, the hon. and learned Gentleman will find some interesting food for study in the decision of the Judicial Committee of the Privy Council this morning, which proves that all that he and other hon. Members have said has been totally wrong from start to finish.

Dr. Gray: In future, will my right hon. Friend try to ensure that these meetings are held not only in London but in different Commonwealth capitals each year?

The Prime Minister: Yes. We have tried to ensure that. Indeed, I think that I was the first British Prime Minister to attend a conference in Africa. That was at Lagos in 1966. On the question of the present Conference, we put forward the suggestion of Canada as a suitable location at an early date, but, in the event, the Commonwealth as a whole decided on this date and chose London for this occasion.

WELSH OFFICE

Mr. Gwynfor Evans: asked the Prime Minister what plans he has now made for increasing the responsibilities of the Welsh Office; and if he will make a statement.

The Prime Minister: I have as yet nothing to add to the Answers which I gave to Questions on this subject on 25th January.

Mr. Evans: Will the Prime Minister now fully implement the promises which the Labour Party made in 1964 in its election programme to transfer the Welsh responsibilities of the Ministries of Education, Agriculture and Health to the Welsh Office? Is he aware that, now that the Welsh people are deciding to live as a free nation, which is the message of three by-elections, the Government have a bounden duty to develop a Welsh civil service—[Interruption.]—in readiness for self-government?—[Interruption.]

The Prime Minister: I missed some of those no doubt well chosen words. On the early part of the supplementary question, as I told the hon. Gentleman before, we are continuously reviewing the position of individual Departments to see whether we can get more devolution consistent with economy and efficiency, but it would not be right to do that if it were contrary to the interests of Wales or involved a big addition to staff and costs.

Mr. E. Rowlands: Would my right hon. Friend take it from hon. Members on this side of the House that what the electors of Caerphilly said to the Government last week was that they wanted more jobs as a priority rather than administrative devolution? Would he therefore ensure that more jobs are provided to replace those in the declining coal industry?

The Prime Minister: My hon. Friend is aware of the very great priority being given to economic recovery in Wales and, in particular, to the very sweeping new incentives which have been created, particularly in areas of colliery closures. The problem in Wales has been aggravated by the colliery closure programme. A considerable amount of new industry has been steered to Wales, which would not have been possible under the general philosophy of the hon. Member for Carmarthen (Mr. Gwynfor Evans), but the closure of uneconomic collieries has intensified the problem.

PRIME MINISTER OF SOUTH AFRICA (VISIT)

Mr. Marten: asked the Prime Minister if he will invite the Prime Minister of South Africa to visit Great Britain to discuss matters of mutual concern.

The Prime Minister: I have no plans to do so, Sir.

Mr. Marten: But as Britain stands to suffer an immediate loss if the price of gold is increased, what steps do the Government propose to take to secure the co-operation of the South African Government in maintaining the price of gold?

The Prime Minister: The question about the gold price and the decisions

taken in Washington in March were fully outlined to the House by my right hon. Friend the Chancellor of the Exchequer after that meeting in Washington. I have nothing to add to what my right hon. Friend said on that occasion, except that the hopes and views which he then expressed have been amply borne out by events since.

Mr. Sheldon: But since the effectiveness of sanctions on Rhodesia very largely depends on the co-operation obtained from South Africa, can my right hon. Friend say what attempt has been made to secure this co-operation?

The Prime Minister: We have been in touch with the South African Government on a number of occasions. Last year, I had talks with the Foreign Minister of South Africa. But, as my hon. Friend knows, the United Nations has laid down procedures for dealing with the question of international sanctions.

DISARMAMENT

Mr. Molloy: asked the Prime Minister if he will give details of the communications from Mr. Kosygin and President Johnson on further proposals for disarmament, following the agreement on non-proliferation; and what reply he has sent.

The Prime Minister: Our views on the Soviet Government's further proposals for disarmament, which we received on 1st July, and on President Johnson's message to the opening Session of the 18-Nation Disarmament Committee on 16th July, were set out in the speeches of my right hon. Friend the Foreign Secretary and my right hon. Friend the Minister of State for Foreign Affairs in the debate in the House on 18th July. I have no further information to give the House today.—[Vol. 768, c. 1679–1805.]

Mr. Molloy: Will my right hon. Friend maintain the pressure to have continuous conferences to bring about disarmament, which is the only guarantee for the survival of the world? In view of the dangerous situation which now obtains in Europe, would he consider advocating even more strongly the establishment of a peace and security council for Europe?

The Prime Minister: With reference to the continuing conferences which my hon. Friend wants to see, there is the conference, again reconvened, in Geneva of the 18-Nation Disarmament Committee. My hon. Friend will have been delighted to see the very important initiative taken by Her Majesty's Government through my right hon. Friend the Minister of State for Foreign Affairs in his proposals concerning bacteriological warfare. With regard to a new security arrangement or security conference for Europe, I have nothing to add to questions I have answered on previous occasions about my talks with Mr. Kosygin.

Sir A. V. Harvey: Will the Prime Minister convey to Mr. Kosygin that it would be helpful to world disarmament if Soviet Russia took its forces out of Czechoslovakia?

The Prime Minister: I have nothing to add to what my right hon. Friend said to the House in the debate on foreign affairs last Thursday. But we are, of course, in close touch with Mr. Kosygin on questions of disarmament. We very much welcome the initiative that he took on the day the non-proliferation treaty was signed, and equally, of course, the initiative by President Johnson. We look forward with some hope to the discussions between the United States and the Soviet Union in the light of those two new initiatives.

Mr. Paget: Does my right hon. Friend think that disarmament is advanced by supplying arms to Nigeria and to Zambia, particularly in the latter case, when neither we nor anybody else is in a position to do anything to help Zambia if she meets the consequences of using those arms?

The Prime Minister: The question of Nigeria was fully debated yesterday, not for the first time in this House, and that matter was dealt with. As to Zambia, as is made clear in an Answer of mine to a later Question, we made it clear to President Kaunda when he raised the defence question with us that we are prepared to have joint talks with the Zam-bian Government about the equipment which they need. We have made it clear that there is no embargo on defensive arms to Zambia.

Mr. Biggs-Davison: Is the Prime Minister aware that many of us think that what the Foreign Secretary said in the foreign affairs debate about the situation in Czechoslovakia was not up to the importance of these events? Is it not time, so many years after the Yalta partition of Europe, that the peoples of Europe were enabled to unite in peace and freedom?

The Prime Minister: I have not anything to add to what my right hon. Friend said on this very important, difficult and delicate issue in his speech last week. I am sorry that the hon. Member does not think that my right hon. Friend's speech measured up to the importance of the subject, but from his own standards of what measures up to the importance of the subject I am, perhaps, rather relieved.

BUSINESS OF THE HOUSE

The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): With permission, Mr. Speaker, I should like to make a business statement affecting tomorrow's arrangements.
In addition to the business already announced, there will first be a debate on the Report published today, from the Committee of Privileges.

Mr. Peyton: Does the Leader of the House mean—at least, by omission— that he will do nothing to remedy the deficiency which occurred last night? Does he realise that his perfectly reasonable response initially to my right hon. Friend the Leader of the Opposition led us to believe that he thought that his own reputation was at stake and that he would do something about it?

Mr. Peart: I was merely announcing a debate on an important Report from the Committee of Privileges.
As to the matter of last night, I gave my assurance that I will look at that and I am doing so. I have in no way sought to mislead any hon. Member, on either side. Good relations are important in a certain sense. In that sense, I am still considering the matter, and I believe that we shall achieve something which is sensible.

Mr. Wyatt: On a point of order. May I respectfully ask you, Mr. Speaker, why you have twice refused me permission to ask a Private Notice Question of the Foreign Secretary about the—

Mr. Speaker: Order. The hon. Member is Parliamentarian enough to know that it is out of order for him to seek to inform the House of the nature of the Private Notice Question which Mr. Speaker has refused.

Mr. William Hamilton: May I ask my right hon. Friend whether the debate on the Report from the Committee of Privileges will be on a Government Motion to approve the Report? If it is, some of us might want to amend it. Can my right hon. Friend say what time the debate will come on?

Hon. Members: Hon. Members: Answer.

Mr. Peart: I am sorry, I was talking to colleagues, which is not unusual.

Mr. Frederic Harris: Ask your hon. Friend to repeat the question.

Mr. Peart: A very good idea.

Mr. William Hamilton: May I ask my right hon. Friend, first, whether the debate on the Report from the Committee of Privileges will be on a Government Motion to approve the Report? If it is, some of us would like the opportunity of putting down an Amendment to that Motion. Secondly, at what hour is the debate likely to come on?

Mr. Peart: My hon. Friend is, perhaps, being rather dogmatic at this stage. I will put down a Motion tomorrow and I hope that it will be taken immediately. A matter of privilege is a matter which affects the whole House. It is urgent and I like to get rid of it. [HON. MEMBERS: "What time will it be?"] Immediately —half-past three.

Mr. Ellis: Will my right hon. Friend reconsider the matter? Surely it is quite reasonable for an hon. Member to ask the Leader of the House what form of Motion is being put down. He may wish to amend it. Cannot we have an answer to that?

Mr. Peart: I hope that my hon. Friend will look carefully at the Report. The Motion will be to accept it.

Mr. Emrys Hughes: Will the Leader of the House assure us that the same procedure will be adopted as on previous occasions, and that there will be a free vote and the Whips will not be on?

Mr. Peart: Yes. I have considered this and I think that on a matter of privilege, which involves individual hon. Members, it will be a free vote. I hope, therefore, that my hon. Friend will be objective when he considers his decision.

Mr. William Hamilton: May I press my right hon. Friend? Did he not say in his original statement that the debate would take place after the business which had already been arranged? [HON. MEMBERS: "NO, at 3.30."] We are satisfied that it will take place at 3.30. Can we, therefore, be assured of the opportunity to table Amendments to the Government Motion?

Mr. Peart: If that is necessary, Mr. Speaker must decide whether to accept manuscript Amendments. I hope, however, that the Motion which I table will be broadly accepted. It will be taken at the start of business. My hon. Friend must carefully read the Report.

BROADCASTING

The Postmaster-General (Mr. John Stonehouse): With permission, Mr. Speaker, I should like to make a statement about broadcasting.
As the House knows, the December, 1966 White Paper on Broadcasting recorded the Government's decision that for the present the B.B.C. should continue to be financed through licence fees. It added that the Government had looked to the Corporation to set itself even more exacting financial objectives and that the B.B.C. had undertaken to make special economies. As a result of these economies and of the Government's measures, no increase in the licence fee was foreseen before 1968.
Earlier this year, the Corporation decided to retain the services of McKinsey and Co. to review the Corporation's present organisation and management methods with a view to improving their efficiency. Any improvements flowing from the McKinsey study will be long term in their effect.
Because of the efforts made by the Government in reducing licence evasion, and economies by the Corporation itself, we have been able to avoid an increase in the licence fee so far. But now the B.B.C. must have more revenue if it is to maintain and develop its broadcasting services. Accordingly, from 1st January, 1969, the combined sound and monochrome television licence fee will be increased from £5 to £6; and the combined sound and colour television licence fee from £10 to £11. The sound-only licence fee will remain unchanged at 25s.
I have also decided to increase the number of permitted hours of television broadcasting. For BBC 1 and independent television I have authorised an extra 3½ hours a. week, and an extra 50 hours a year for outside broadcasts. For BBC 2 1 have authorised an extra 2 hours a week, and 25 hours a year for outside broadcasts.

Mr. Bryan: The Postmaster-General has given virtually no explanation of the reasons for this very steep rise. May I ask him two questions? First, why he has not referred this increase of 20 per cent., the third in five years, to the Prices and Incomes Board, affecting as it does the whole population and, in particular, the old and the sick? Secondly, is he aware that this extra sum could have been raised by accepting advertising on Radio 1—[HON. MEMBERS: "No."]— which was actually designed by the Government as a direct replacement of commercial pirate stations?

Mr. Stonehouse: The increase in the licence fee was unavoidable because of the additional costs the B.B.C. has to undertake in increasing the broadcasting hours which I have just permitted and also in continuing to improve the quality of the programmes. The increase was envisaged some years ago. It is because of the action taken by the Government and by the B.B.C. itself, which has improved its own efficiency, that the fee has been kept down for so long. This is entirely in accord with the White Paper on this subject. Reference to the Prices and Incomes Board would be inappropriate for a fee—[HON. MEMBERS: "Ah."]— which comes into the Consolidated Fund and cannot be considered as a straightforward charge in the orthodox sense.
Advertising on Radio 1 is something which, I know, many hon. Members are in favour of, but personally I would favour considering this subject after the B.B.C. has had some experience of its local broadcasting, rather than rush into a decision now. There are strong arguments against commercial advertising on B.B.C. which have to be weighed very seriously before we come to any decision.

Mr. Heffer: Will my right hon. Friend make it clear that there will be no question of commercial advertising on the B.B.C? Would he also not agree with me that the £1 increase is a high figure for certain sections of our population, an increase which they cannot afford? I hope my right hon. Friend will have a further look at this point. Thirdly, will he approach the B.B.C. with a view to reducing some of the ridiculously high fees which are paid to some of the people who appear on television—there could be economies in this direction—including some top level politicians who get them?

Mr. Stonehouse: I have already made it clear that commercial advertising on the B.B.C. is ruled out for the time being, although, of course, one cannot anticipate what eventual decision may be made about B.B.C. financing in the long run. But for the time being I am not prepared to allow the B.B.C. to have commercial advertising, nor has the B.B.C. requested it.
My hon. Friend referred to this affecting certain classes within the community. I am well aware that certain sections of the community may be affected by this increase, but I think that it would be unwise to make exemptions for particular groups in order to give a benefit in kind.
I think we should allow the B.B.C. to reorganise the way it runs its business in the light of the McKinsey Report.

Mr. Maudling: Is the right hon. Gentleman aware that his answer about a reference to the Prices and Incomes Board is totally unsatisfactory? Is there any reason at all why this increased charge should not be the subject of the same inquiry as in the case of an increased charge by a nationalised industry?

Mr. Stonehouse: The right hon. Gentleman has completely misunderstood the point. This is not a charge. [HON. MEMBERS: "Oh."] This is a revenue fee for a licence—

Hon. Members: Hon. Members: Oh.

Mr. Speaker: Order. We are having too many atmospherics.

Mr. Stonehouse: It would be quite inappropriate to refer a revenue fee to the Prices and Incomes Board for investigation. Furthermore, right hon. and hon. Members opposite should remember that not only does this country have one of the best broadcasting systems in the world, but that the licence fee is one of the lowest in the world, and is certainly the lowest, as far as I understand, in the whole of Western Europe.

Mr. W. Baxter: Is my right hon. Friend aware that this announcement will be met with a great deal of concern throughout the country, and that it seems to me to be a disgraceful increase in the licence fee? Will he take whatever steps are necessary to safeguard the old-age pensioners under the scheme? Would he, further, see whether or not some economies can be made in the running of this very vast and ill-run organisation? Furthermore—

Mr. Speaker: Order. Questions must be reasonably brief.

Mr. Baxter: How has my right hon. Friend, a Minister new to his present post, come to such a very important conclusion without giving the matter the full consideration which it deserves?

Mr. Stonehouse: I gave very careful consideration to this matter before coming to the House to make this statement. I am satisfied that the B.B.C. requires the extra £15 million a year to service the extra broadcasting hours that it is now being allowed and also to keep up the quality of its broadcasting, and that there was no alternative but to agree to the increase in fees, which, as I said earlier in my replies, was envisaged some years ago. It is not as though this has come as a sudden shock to the House or opinion outside.
The House really must consider, does it want this country to continue to have the high quality of the B.B.C. or does it wish that the B.B.C. should be forced to take advertising to a very large extent to finance its activities, which would change the character of broadcasting to a very fundamental extent? Hon. Mem-

bers should consider these points before they attack the increase.
I am aware, as I said earlier, that there are some classes who will be affected by this increase, and I am considering a plan which would allow old-age pensioners, and, perhaps, additional groups, to pay their T.V. Licence fee partly in advance and partly in arrears at the rate of 10s. per month.

Several Hon. Members: rose—

Mr. Speaker: Order. Questions and answers must be reasonably brief.

Mr. Edward M. Taylor: Is the right hon. Gentleman aware that on Saturday the Secretary of State for Employment and Productivity said that the Government were winning the battle against rising prices? How can Ministers possibly say this when they themselves are putting up so many prices? Why cannot we do something to protect the people who may be deprived of television reception— old-age pensioners, for instance—by this absurd rise?

Mr. Stonehouse: This increase has been kept off for about two years. I am wholly satisfied that at this stage it must be allowed.

Dr. David Kerr: Would my right hon. Friend accept that there may be too many radio doctors and that many of us are very surprised that no more of the current licence fee is being spent on a more imaginative use of radio time to help education? When he conveys to the B.B.C. the admiration of so many of us at its maintaining high standards of service without raising the price for so long, will he also draw attention to the possibility of using more time for this purpose?

Mr. Stonehouse: I am sure that the B.B.C. will read with great interest the exchanges in the House today.

Sir D. Walker-Smith: Are we to understand from the right hon. Gentleman's answers about the Prices and Incomes Board that it is the policy of the Government that, when an industry can say that it has been thinking about increases for some time, and considers them unavoidable, there will be no reference to the Board, even if there is a direct and injurious impact on the old, the sick and


the poor—or is this doctrine restricted to State corporations?

Mr. Stonehouse: The right hon. and learned Gentleman is quite wrong in assuming any such thing. As I said, the main reason why this is not being referred to the Prices and Incomes Board is because it is a revenue licence fee.

Mr. Mendelson: Is my right hon. Friend aware that there will be a widespread acceptance that the B.B.C., just because of its high quality and great influence, must be maintained as an independent organisation and must, therefore, be able to raise the money to pay for its work? But would he also accept that a plan to pay before or after one receives one's licence is no good, and that, if he wants to help old-age pensioners and similar groups, he should have a special new rate for them? Finally, would he strongly resist any attempt to commercialise the B.B.C.?

Mr. Stonehouse: I will certainly take those points into account. My personal view is that benefits in kind to any section of the community are inadvisable.

Mrs. Ewing: Would the right hon. Gentleman not agree that there is some injustice in charging the full fee to areas which receive only a partial service? Some parts of Scotland get no B.B.C.2 and very irregular B.B.C.1, and this applies to other parts of the country. Would he reconsider the increase for these areas, because that would greatly add to the injustice?

Mr. Stonehouse: I have carefully considered this point, but I have been advised, and I must accept the advice, that it would be impossible, and also very bureaucratic, to try to draw a line between different viewers, whether or not they receive a particular programme. Therefore, I have had to turn down that proposal.

Mr. Spriggs: In view of the importance of this subject, and the fact that it affects most homes in the country, should we not debate this matter before the licence fee is increased?

Mr. Stonehouse: My right hon. Friend the Leader of the House is here and has, I am sure, taken note of that request.

Dr. Winstanley: While we accept that it is necessary for the B.B.C. to have the money to fulfil its increasing obligations, would the right hon. Gentleman bear in mind that there are other ways of financing both independent and public service broadcasting and that this revenue fee will bear very heavily on those most dependent on broadcasting—the elderly and those living alone? How will he divide the 3½ hours additional broadcasting between the weekend programme contractors and those doing programmes midweek?

Mr. Stonehouse: The maximum hours per day will be increased from 8 to 8½, so that the extra hours will have to be spread through the week. The wider questions of financing which the hon. Gentleman raised, mut be considered in a much wider context. I shall certainly bear in mind those points.

Mr. Hugh Jenkins: Is my right hon. Friend aware that he has gone the wrong way about raising the additional revenue which the B.B.C. undoubtedly needs? Is he aware that what he has just announced is that fees for the wealthy section of the community who use colour television will be increased by exactly half as much as those paid by the less well-off section which receives only black and white? An increase from £10 to £11 is exactly half an increase from £5 to £6. This is half as much for the rich as for the poor. Will he look at that again?

Mr. Stonehouse: Considering that the colour fee is £11 and the black and white fee is £6, the relationship is, I think, quite fair.

Mr. Stratton Mills: What specific machinery did the right hon. Gentleman use to inquire into the B.B.C.'s application for an increase? Second, is he aware that an average increase of half an hour a day in broadcasting hours is disappointingly small? Would he say, also, how long both the B.B.C. and the Independent Television Authority applied for?

Mr. Stonehouse: I am satisfied that the increase was justified. Inquiries into the position in the B.B.C. have fully convinced me that it is anxious to achieve the highest efficiency. This is why McKinsey was appointed to conduct this survey.
It is socially desirable not to have unlimited hours. I am satisfied that the extra 3½ hours a week will aid both the B.B.C. and the I.T.V. to improve their programmes.

Mr. Maclennan: May I press my right hon. Friend on the point that the remoter regions are more dependent on broadcasting than the areas which are well served by the B.B.C. at present? There is a considerable inequity in increasing the fee in those very areas which do not enjoy B.B.C. 2 and whose reception of B.B.C. 1 is poor. Would he consider this again? We have experienced regional variations in taxation under the Government already, and it should not be beyond the wit of the Government, and certainly not beyond his wit, to devise an equitable system.

Mr. Stonehouse: I appreciate the seriousness of that point, but I am satisfied that it is very difficult to have a system which would ensure that whatever differential fee is charged is fair to the viewers.

Sir G. Wills: In view of the considerable increase in fee, would the right hon. Gentleman see that the many thousands of people in the South and South West receive uninterrupted transmissions of B.B.C. programmes instead of the very tweedy effects which they get at present?

Mr. Stonehouse: If there are any problems over reception, I will certainly examine them.

Mr. Shinwell: Before my right hon. Friend finally decides to impose this increase—I understand that the matter of a debate in the House will be considered, and that there will be an opportunity for us to come to a decision—would he discover from the B.B.C. its estimate of additional revenue which could be obtained if everybody who has a television set paid the licence fee?

Mr. Stonehouse: There has already been a considerable increase in income as a result of stamping out a certain amount of evasion. I doubt whether, if every viewer in the country paid the fee—and that is not yet the case—it

would raise the additional £15 million a year which is required.

Mr. Bryan: Is the right hon. Gentleman aware that hon. Members are not clear about his personal views about advertising? Are we to understand that, when the B.B.C. local radio experiment runs out of money, he may then advise the B.B.C. to apply to him for permission to have advertising?

Mr. Stonehouse: This is another question. I answered points on it last week. I do not want to be drawn into a long discussion about it, because it is inappropriate, but I must make it clear that I am not proposing to allow—nor has the B.B.C. asked for it—any advertising on sound radio before the end of the local stations experiment, which is due to be examined in the middle of next year.

Several Hon. Members: rose—

Mr. Speaker: Order. I must protect the business of the House.

Mr. Marten: On a point of order. May I briefly seek your guidance, Mr. Speaker?
A new Member has been waiting at the Bar for 20 minutes to take his seat. One of my hon. Friends and I, the other day, had to wait until the end of three statements before the Member concerned took his seat. The day when a new Member takes his seat is a very important day in his life. Could this not happen immediately after Question Time and before statements, since he would then have the advantage of having the Prime Minister of the day to "see him in"? Could you tell me, Mr. Speaker, which Committee this should be referred to?

Mr. Speaker: It is an interesting point, which I think next Session's Select Committee on Procedure might well look into. In the meantime, by pursuing this point of order, we are further preventing the Member from taking his seat.

NEW MEMBER SWORN

Alfred Thomas Evans, esquire, for Caerphilly.

BUSINESS OF THE HOUSE (SUPPLY)

Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock, and that if the Motions relating to Home Ownership and Interest Rates and Terms and Conditions of Employment shall have been disposed of before Ten o'clock, Mr. Speaker shall proceed to put forthwith the Questions which he is directed to put at Ten o'clock, by paragraphs (8) and (9) of Standing Order No. 18 (Business of Supply). —[Mr. Peart.]

BUSINESS OF THE HOUSE

Ordered,
That, notwithstanding anything in sub-paragraph (b) of paragraph (1) of Standing Order Na. 2 (Exempted business) the Proceedings on the Civil Evidenece Bill [Lords], the Civil Aviation Bill [Lords], the Theft Bill [Lords] and on the Motions relating to Sea Fisheries may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Peart.]

EQUAL PAY

4.1 p.m.

Mr. Christopher Norwood: I beg to move,
That leave be given to bring in a Bill to establish the principle of equal pay.
The question is not so much whether hon. Members will oppose the suggestion of equal pay, but whether they are prepared to bring it into reality.
I am reminded of a book written by John Stuart Mill, more than 100 years ago, which has left a lasting impression on me. In 1888, 80 years ago, the Trades Union Congress passed a proposition calling for the implementation of the equality of pay for men and for women for work of the same kind and value. I am reminded that 50 years ago, in 1918, women were allowed to have a measure of equality of political influence for the first time. I am reminded that, in 1955, women in the Civil Service, in the employment of the State, obtained the right to the same pay for the same work.
I doubt whether the House will dispute the principle. I have written to a large number of my colleagues, and I have had more than 100 favourable replies of one kind or another. The only question is not whether the principle be there, but whether people are prepared to carry it out.
The history of equal pay is not one of the denial of a principle. It is the procrastination of 100 years and the refusal to find that any moment is a suitable time. Despite what has been said by Her Majesty's Ministers and by my right hon. and hon. Friends, my suggestion is that now is as good a time as any.
Consider the size of the women's working population. Consider the necessity for economic growth. Consider the argument advanced frequently by the Government that increased payments are involved with increased productivity, and that, if people are paid more, they will work harder—one of the few exceptions to the Government's prices and incomes attitude.
It is a growing problem. More than 4 million women earn less than 5s. an hour. The Bill proposes to end the discrimination over a period of time, and that existing machinery shall have the time in


which to draw up arrangements that will be suitable. I am suggesting in my Bill that it should be about a year and that, after that, there should be about three years in which we can move towards equal pay step by step. Where there is a difficult problem in deciding whether work is of equal value, I propose that it should be referred to a tribunal system somewhat analagous to that set up under the Redundancy Payments Act.
I am proposing that any individual or organisation representing an individual shall have the right to bring a case before one of these tribunals with a view to establishing that here is a case of discrimination and here it must be ended.
A recent public opinion poll published in theEvening Standard shows a gigantic public majority in favour of the principle and support of equal pay. My view of the situation, brought out not least by the reaction of the Ford strikers, is that women's patience is wearing thin and that it is time the community as a whole took note.
The House may look at this, as at many other questions, in two ways. It may regard it as an issue of the straight practicality of what is possible and what can be done. It may say that it is not easy to do. It may look at it from the technical, practical point of view. On the other hand, it may say that this is a question of principle. If it does, then, in my submission, the argument is over.

Question put and agreed to.

Bill ordered to be brought in by Mr. Norwood, Mr. Winnick, Mrs. Anne Kerr, and Mr. Bidwell.

EQUAL PAY

Bill to establish the principle of equal pay, presented accordingly and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 192.]

Orders of the Day — SUPPLY

[29TH ALLOTTED DAY],—considered.

Orders of the Day — HOME OWNERSHIP AND INTEREST RATES

4.9 p.m.

Mr. Geoffrey Rippon: I beg to move,
That this House, noting the effect of the present high level of mortgage interest rates, deplores the policies of Her Majesty's Government which have caused hardship to existing house purchasers and are discouraging home ownership.
The provision of good housing must be the most important social objective of any Government, yet there is no other sphere of activity in which the present Administration have more cynically abandoned the many pledges on the faith of which they secured office. Both before the 1964 and the 1966 General Elections, the leaders of the party opposite repeatedly promised much more help to home ownership through bigger and cheaper mortgages. The House will recall that the White Paper on the Housing Programme 1965 to 1970 (Cmnd. 2838), published in 1965, spoke of
…a large and rising demand for more houses for owner-occupation which shows no sign of abating, and the housing plan must meet it.
No one disputes the demand for home ownership. Survey after survey has shown that at least 70 or 80 per cent. of our people, particularly young people, want to own their own homes. What has happened? In absolute numbers and as a percentage of total completions —both figures are relevant—private house building for owner-occupation has declined year by year since 1964. On the other side of the picture, when the present Government came to office in October, 1964, the building society mortgage interest rate was 6 per cent.; in February, 1965, it rose to 6¾ per cent.; in June, 1966, it rose to 7⅛ per cent. for new borrowers; and now it is at 7⅝ per cent. Interest rates have now risen to a record level, and they have been higher for a longer time than at any other period in our history.
We have come a long and miserable way since the right hon. Member for Belper (Mr. George Brown) flew his gay kite of 3 per cent. which brightened the sky of the 1964 General Election, and— let us face it—induced many thousands of people to vote for the Labour candidates. I know that some people say, as I think the right hon. Gentleman does himself, that there is doubt about the exact terms which he used, but at Colchester on 29th September, 1964, he said:
People do not care whether I said 3, 4, 2 or no per cent. We will get the cost down.
In fact, as everyone knows, the Government have not done it. At least the right hon. Member for Belper has had the decency to resign from a Government who are totally discredited.
The present record rate of interest means that a man buying a three-bedroom house has either to pay, on average, at least 10s. a week more than in October, 1964, or extend, as many people do, the period of replayment. What does extending the period of repayment mean in practice? As theBuilding Societies Gazette pointed out in May, many householders with owner-occupier mortgages may not be able to pay off their debts during the remainder of their working lives. They face a prospect of never-ending debt.
Hon. Members may have seen the article in theSunday Express of 14th July which gave the example of a man of 30 who was granted a loan of £4,000 early in 1965 towards the purchase price for a £4,500 house at the rate of 6 per cent. Repaying the loan over a period of 25 years at £312 per annum, he would have had the house as his own at the age of 55. Now, within four years, the interest rate has been raised three times, till it is now at 7⅝ per cent. On each occasion, because ho could not afford to increase his annual repayments, he had to opt to extend the period of the mortgage, with the result that the house will not be his until he is 73.
That is, perhaps, a reasonably average case. At least, he is better off than the man who had an unusually long mortgage, a 35-year mortgage, who found to his horror that, unless he increased his repayments, his home loan would take 2,000 years to pay off.
It is no good hon. Members opposite suggesting, as they sometimes do, that the building societies should keep the rate down. Obviously, the building society rate had to be raised if a mortgage famine were not to be created, and it became inevitable, because of high Bank Rate, rising taxation and Government fiscal and monetary policies which have severely curtailed saving and so forced many small savers to withdraw their deposits.
If the hardship to existing house purchasers is great, the discouragement to those who believed that a Labour Government would help them to become home owners has been even worse. It is true that building societies are lending more money to house purchasers than ever before—that is a measure of the demand for home ownership—but the pressure for advances is so great that rationing of mortgages remains severe, and steadily rising house and land prices mean that each purchase requires more money than ever before.
A young married couple who today seek a house of their own are much worse off than a corresponding couple in 1964. and their position is deteriorating month by month. Here is an example. In 1964, mortgage repayments on a £3,000 house would have taken a quarter, of average industrial earnings. Today, they take over one-third, and at that price, of course, it would be a smaller and inferior house. This is where the present high mortgage rates have their most crippling effect on young couples without much capital and with their present earning capacity well below their future prospects.
Many building societies normally restrict the amount which they are prepared to lend so that monthly repayments do not exceed one week's wages. The high rates, therefore, mean that many prospective buyers are being offered much smaller mortgages. Nor is it any good for most of them to look to the local authorities for loans, since the Government have deliberately restricted the funds available for this purpose. After the savage cuts from mid-1965 to mid-1966, the Minister fixed the figure at £130 million for 1967–68, and he has announced a similar limit for the current financial year. This is £50 million a year below 1964, although house prices have risen since then by over


25 per cent. and, as I suggested at Question Time today—I have thought about the matter carefully—may well rise by another 10 per cent. this year, or certainly considerably more than the Parliamentary Secretary suggested.
Many local authorities are at this stage of the year already in a critical position in regard to home loans. Some have already had to suspend their loans altogether because their quotas have been exhausted.The Times published a list of some of these on 6th June. I hope, therefore, that the Minister will tell us what he proposes to do to remedy the present serious situation.
It will not be enough for the right hon. Gentleman to say that the Government have introduced their much-heralded mortgage option scheme or that, as from 1st April, 100 per cent. mortgages may be available for those who exercise their option, although—and in our view, this is quite wrong—for no one else.
In the debate on the Housing Subsidies Bill, I described the Government's proposals as the great mortgage fraud, and everything that has happened since has confirmed that verdict. The principle of a mortgage option scheme to help those paying less than the standard rate of tax is unexceptionable—it was in the Conservative Party's own election manifesto—but the Government's scheme does little to assist anyone. It is not surprising, therefore, that it has attracted only about 5 per cent. of existing borrowers and 10 per cent. of new borrowers—many of whom, as I shall show later, rather regret the decision which they have made.
At best, the Government's scheme is a classic example of giving away with one hand what they have already more than taken away with another. Moreover, as I said at the outset, the need to make an irrevocable choice to opt in which is based simply on a man's estimate of his own earning capacity and tax liability throughout, perhaps, a whole decade is bound to create something of a lottery. What I did not expect was that this year's Finance Bill would change the terms of the lottery so quickly and so cruelly. Once again, not only have thousands of people who trusted the Government been robbed of any hope of a prize, but they have had to pay more for their tickets. Many of them are in the position of

punters who have lost not only their shirt, but their braces.
The Government spent about £80,000 advertising their mortgage option scheme, and published a booklet called, "Your Guide to the Mortgage Option Scheme", which indicated that anyone paying less than £80 a year in tax was likely to benefit from an option mortgage.
As a result of this year's Finance Bill, in many cases this has proved wrong. I shall not reiterate the arguments I put forward during the debate on 3rd July, except to say two things. First, in our view the Government are now under a clear duty to warn people that the rise of the mortgage rate from ⅛ per cent. to 7⅝ per cent. means that the advantage of opting has seriously diminished. Secondly, there is a clear moral obligation to compensate those who have suffered hardship as a direct result of the Government's misleading advice to them.
On 3rd July 1968, at column 1611, the Financial Secretary said that because he could not help within the framework of the Finance Bill that did not mean that that shed the whole Government obligation, and he agreed that the matter should be given the most urgent examination by the Minister of Housing and Local Government. I tabled a Question today
To ask the Minister of Housing and Local Government whether he has completed the urgent consideration of the effect of the provisions of the Finance Bill on the operation of the mortgage option scheme; and if he will make a statement.
No doubt there will be a Written Answer to that Question as it was not reached this afternoon, but perhaps the Minister can explain the position to the House today.
The evidence of hardship is clear, and it was clear during the debate on the Finance Bill. Many hon. Members on both sides of the House have sent cases to the Government and explained the difficulties confronting their constituents. I have had a mass of letters on this subject, and I shall quote just one from a man in Newcastle. The letter is dated 13th July, and arose out of the report of the debate on 3rd July. He said:
I hope to hear more about the repeal or review of that legislation and in particular the refusal of any opportunity for opting out by the borrower.


It was my misfortune that I signed an option for this property before the Budget and would have benefited from the conditions that obtained at that time.
Now however I estimate that I shall be paying this year £8 more than I would expect to pay outside the scheme and future years will cost me some £20 annually over the ordinary borrower.
How can one trust a Government that perpetrates such frauds continually?
How, indeed? And that is not by any means an exceptional case. Indeed, his loss may be regarded as rather on the low side compared with some of the other cases brought to my attention.
I have three questions which I hope the Minister will answer. First, will he give an undertaking that when this extremely misleading document, "Your Guide to the Option Mortgage Scheme" is reissued, as the Joint Parliamentary Secretary promised, it will be drastically amended to show the danger of going into this option without much more advice than many people have had, and that he will issue a further series of advertisements explaining how the Government falsified the hopes of so many people and what he is going to do about it?
Secondly, will he state the steps which the Government propose to take to enable those who have suffered hardship as a direct result of the Government's actions and statements in their guide book to be compensated? Thirdly, will he say now what he proposes to do to afford those who have been mistakenly induced to opt into the Government's scheme an opportunity to opt out?
I know that this requires discussions with the building societies. As we were told, there are administrative difficulties, but, clearly, some people have been wrongly induced to come in, and they ought to be given the opportunity to get out. I know that the Minister invariably pleads that he is bound by the provisions of the Housing Subsidies Act, but it is not impossible for the Government to remedy their own mistakes in their own legislation if they really want to do so.
I have dealt briefly with the harsh effects of high mortgage interest rates on existing and new borrowers, whether in or out of the mortgage option scheme. No one can doubt the damage which the Government have done. The question

now is: how can we mitigate the hardship they have caused and give new hope to those who want to own their own homes? I shall not pretend that we can evade all the consequences which flow from economic and fiscal policies which have brought this country so low, but I believe that there are some things which could be done immediately to encourage home ownership and to bring it within the means of more people.
First, the Government have it within their power to cut the cost of new housing by abolishing the Selective Employment Tax—it should be altogether, but certainly for the construction industry, which serves such an essential social purpose—and by bringing down the price of land by repealing the Land Commission Act and abolishing the Land Commission.
Secondly, as part of a policy of reducing the cost of house purchase they should reverse their recent regrettable decision to suspend the extension of compulsory land registration. This has apparently been done by the back door, through correspondence with the Lord Chancellor and others. This is a serious state of affairs, because the extension of land registration is about the only practicable way of reducing the incidental costs of house purchase which is fair to all the interests concerned.
The Minister will recall that some proposals for simplifying conveyancing were shelved because the extension of land registration was to be expedited. Perhaps I might give some indication what is at stake. In the case of a £5,000 house there is a saving of more than £20 in fees if the land is registered. I hope the Minister will give us an assurance that this matter will be reconsidered.
Thirdly, in our view the Government should recognise that difficulty in finding the deposit is at least as formidable an obstacle to the prospective house purchaser as the mortgage repayments. The Government's insistence on limiting 100 per cent. loans to those who have entered the option scheme is illogical, and it may be dangerous, because this policy may induce some more borrowers to exercise this irrevocable option when it would be against their long-term interests to do so. I submit that 100 per cent. loans, or help with the deposit in some other form— perhaps in the way that has been suggested from these benches—should be designed to help young people who had


not got much capital, but may already be standard rate taxpayers, or expect to be before long. In our view the cost might be met, at any rate in part, out of the savings on the current level of housing subsidies of one sort or another.
Fourthly, the Government should stimulate far more than they have done private house building for owner occupation. While the total number of completed houses has crept upwards since 1964, completions in the private sector have gone down steadily, and the outlook for the future is far from reassuring. It is true that rather more houses were started in the private sector in 1967 than in 1966, but it was the start of the betterment levy which inflated the figures by at least 20,000.
So, while, this year, we may see some improvement, at any rate at the beginning of the year, in the total number of private houses completed, the underlying downward trend continues. This is illustrated by the fact that this year's starts in the private sector have been officially estimated at 205,000, or more than 30,000 down compared with last year.
But, more fundamentally, the Government have shifted the balance between private house building and council building by an increasingly costly subsidy bill. Ever since 1964 the public housing sector has been growing at the expense of the private sector, in spite of the rising demand for home ownership. Thus housing subsidies for new dwellings in Great Britain have risen from £68 million in 1963–64 to about £100 million in the current financial year. At the same time the rate fund contribution to local authority housing revenue account has risen from £21 million in 1963–64 to an estimated £40 million in 1966–67. These costs will rise still further as a result of the Government's interference through the Prices and Incomes Act with the statutory responsibility of local authorities to strike a fair balance between their tenants and other ratepayers.
We have to recognise that council housing is not only more expensive in terms of cost to taxpayers and ratepayers, but is more inflationary than private housing, which is financed by individual savings. We are in the ridiculous position of raising housing subsidies and controlling rents of council houses to divert many families

from what they really want, which is to own homes of their own. It is, therefore, far more sensible to give such aid from public funds as we can to young people to buy their own homes, rather than spend public money on what is fundamentally the wrong objective.
Finally, the Government must give some indication of their long-term policy on mortgage interest rates. At Question Time an hon. Member opposite referred to the fact that high rents are caused, in the local authority sector as anywhere else, by high interest rates. The report of the Prices and Incomes Board showed that interest rates now amount to about 50 per cent. of total local authority housing costs. This is inevitably reflected in higher rents. The same considerations apply in the private sector.
In the old days members of the party opposite used to say that it was a brutal as well as a foolish thing to make the innocent householder pay for the doubtful luxury of attracting hot money to London. I do not know how much hot money is being attracted today, but it is certainly doubtful whether such a prolonged period of high interest rates as we have suffered under this Government—the most prolonged period of high interest rates in our history—can do anything but put up costs without a sufficient corresponding benefit to our balance of payments or reserves.
To summarise our case against the Government: their basic concepts are in conflict with the ideal of a property-owning democracy; it is not what they really want at all. Their house building programme has yielded a diminishing number of houses for owner-occupation each year. They have attacked the idea of giving council tenants the opportunity of buying their own homes. Their misconceived fiscal policies have caused house prices to soar, and their mismanagement of the economy has precipitated quite astronomic mortgage interest rates. The benefit of their much-vaunted mortgage option scheme has been dissipated by their financial and economic policies and the fact that their scheme has been rejected by the overwhelming majority of mortgagors is the measure of its worth. Their 100 per cent. mortgage scheme, which the Prime Minister and other members of the Government promised in their election manifestos,


remains out of reach to all but an infinitesimal minority.
In the view of my right hon. and hon. Friends and myself the primary objective of a housing policy in any modern democracy must be the fostering of home ownership. Far from smoothing the path towards that goal the Government have made it much more stony. We can say, in the words of Sydney Smith:
The vigour of the Ministry is like the vigour of a grave digger—the tomb becomes more ready and more wide for every effort which they make.
Unfortunately, while Ministers' souls lie mouldering in the grave their bodies go marching on. The sooner they resign the better it will be for all of us. Perhaps the Minister has already made plans to move on to happier spheres of activity. If so, I hope that his swan song this afternoon—if it is to be his swan song— will enable him to depart with a bang and not a whimper.

4.34 p.m.

The Minister of Housing and Local Government (Mr. Anthony Greenwood): My surprise and gratification that the Opposition should have chosen this of all subjects for debate today have not been lessened by the speech to which we have just listened from the right hon. and learned Member for Hexham (Mr. Rippon). It is part of the stock-in-trade of the Opposition to pretend that the Government are hostile to home ownership and have done nothing to encourage it. Nothing could be further from the facts and I am grateful to the Opposition for the chance which they have given me today to prove it.
The right hon. and learned Gentleman referred to the White Paper—The Housing Programme 1965–1970—which set out our policies very clearly. There, we said that the first task was to give housing a greater priority and to push up the rate of building, while within the enlarged housing programme there would be a balance—roughly 50–50—between public building for rent and private building for owner occupation. We said that at that time
while the Government must provide for a steady growth of building for owner occupation, it would be criminal, at the present time, not to allow an even faster growth of building to let

but we added:
the expansion of building for owner-occupation … reflects a long-term social advance which should gradually pervade every region.
That was the statement of our long-term aims, and it is those aims that the right hon. and learned Gentleman says that we have abandoned. He looks to the future and says that it is far from reassuring. I always regard him as the most cheerful Cassandra on the Opposition benches. Over and over again he has prophesied housing failures and all of his prophesies have been belied. On 1st November, 1966, he asked my right hon. Friend the Joint Parliamentary Secretary, who is now Minister of Public Building and Works:
Is the Parliamentary Secretary aware that while the public sector may be holding its own, the private sector is steadily falling? What does he propose to do about that? Does he agree that now there is very little chance of building 400,000 houses even by 1967?"— [OFFICIAL REPORT, 1st November, 1966; Vol. 735, c. 228.]
A short time later, on 15th December of the same year, the right hon. and learned Gentleman turned his fire on the Prime Minister and asked:
Does he agree that there is now no prospect of exceeding 380,000 houses this year, or next year, either?"—[OFFICIAL REPORT, 15th December, 1966; Vol. 738, c. 658.]
The right hon. and learned Gentleman must be even more despondent about the fact that his prognostications have been so wrong.

Mr. Rippon: Have they been so wrong? Is it a matter of 3,000 or 4,000, or 10,000 houses?

Mr. Greenwood: On 15th December, 1966 the right hon. and learned Gentleman was saying that there was no chance of exceeding 380,000 houses in 1967.

Mr. Rippon: Nevertheless, the Government have been very far from the mark.

Mr. Greenwood: Far from the mark, the right hon. and learned Gentleman says. In fact, we completed 404,000. [Interruption.] I am sorry, but that is so. The right hon. and learned Member asked my right hon. Friend the Prime Minister:
Does he agree that there is now no prospect of exceeding 380,000 houses this year, or next year, either?


We built 404,000, which was 24,000 more than the right hon. and learned Gentleman had predicted. We have to measure our achievements against the smokescreen of gloom that he is trying to create.
During every year since we took office we have built a record number of houses. Last year, for the first time in history, more than 400,000 houses were built in Great Britain. The figures for the first half of this year have been published this afternoon and show that 12,000 more houses were completed in that period than in the first six months of 1967— 199,000 compared with 187,000 in the first half of 1967. Since more houses are normally finished in the second half of the year we shall build well over 400,000 houses this year. Another record year is before us.
Within the total we have, as we have promised, made a large increase in building to rent—from 156,000 in 1964 to 204,000 in 1967. Building for owner-occupation has fluctuated, but has never fallen below 200,000 a year, so that in three years 619,000 houses have been built. In the last three years under the Opposition only 568,000 were built.
Perhaps I could put it in another way. If we take the 44 months of Labour administration, 768,000 houses for private ownership have been completed. During the last 44 months of Conservative rule the figure was 678,000. We are, therefore, doing a great deal better.
The rate of building is rising again. During the first six months of this year 107,000 houses were built for owner-occupiers compared with 90,000 in the same period last year, an increase of 17,000 in half a year, or over 19 per cent. Altogether, we have built about 1½ million houses since October, 1964, fairly evenly divided between the public and private sectors.

Mr. Eric Lubbock: The right hon. Gentleman keeps saying "We have done" this and that. Is he aware that the building industry has achieved these figures?

Mr. Greenwood: This has been a remarkable piece of co-operation between the building industry, local authorities, building societies and the Government. It was left to the Labour

Government to get together the Joint Housing Programme Working Party, which is comprised of the various interests, all of which are concerned with house building. It staggers me to think that the right hon. and learned Member for Hexham did not get round to this point a great deal earlier.
I was interested in what the right hon. and learned Gentleman said about the expensiveness of council house building, and many people will draw conclusion from what he did say on the subject. Far from discouraging home ownership, we have done much better than the party opposite. This increase in private building has been more than matched by the success of the building societies in meeting the growing demand for home ownership.

Mr. James Allason: When the right hon. Gentleman says that the Government have done better than the Conservative Party achieved when in office in 44 months, is he saying that the pledge given by the Labour Party in 1964 to build more houses for owner-occupation related to an average over the last 44 months and not to the current figures?

Mr. Greenwood: Our statement meant that we would do better than the Conservatives. That we have done. It meant that we would seek to strike a balance of about 50-50 between the public and private sectors. That we have done. However, we do not have much time for this debate and, while I shall be pleased to give way to any hon. Member who wishes to intervene, I trust that there will not be many interventions, because many hon. Members wish to speak and I do not want them to be crowded out.
In 1960, the building societies advanced £558 million. In 1966 and 1967, they lent £1,245 million and £1,472 million respectively. This year, they are confident of being able to lend a record £1,550 million.
It would be wrong to think that we are concerned only with numbers. We are equally concerned with quality. That is why the National House Builders Registration Council has been reorganised. Private builders and Ministers between them—this is another piece of valuable co-operation—have created a valuable


new instrument which is already having its effect on the quality of the houses produced in the private sector. I appointed Mr. Douglas Calverly as the Chairman of the Council, and under his able leadership well over 80 per cent. of the houses completed for owner-occupation this year will carry the Council's 10-year guarantee of quality. In 1964, the figure was 35 per cent. I do not believe that it is an exaggeration to say that in a very few years' time jerry-building will be literally a thing of the past.
I come to the question of option mortgages, to which the right hon. and learned Member for Hexham referred. We have taken positive action to increase the number of houses built and to improve the quality. We have helped owner-occupiers by the Option Mortgage Scheme, which started on 1st April this year. The Option Mortgage Guarantee Scheme started on the same day.
The first gives borrowers who do not qualify for tax relief a subsidy of 2 per cent. on their interest payments. All borrowers get help, and either the option mortgage subsidy or the tax relief substantially reduce the effective cost of a mortgage. The second helps families who can make larger regular payments, but who have little capital to buy a house.
About 10 per cent. of new borrowers, as the right hon. and learned Gentleman conceded, choose an option mortgage, and the great majority of these are people who would not have been able to obtain a mortgage at all because the regular payments, without the option subsidy, would have been too large in relation to their income.
The Option Mortgage Guarantee Scheme has been criticised because few 100 per cent. loans have so far been given. But many more people have used the scheme than those who have had 100 per cent. loans because many borrowers do not want 100 per cent. loans. The Scheme enables them to get the loan they do want at lower cost than before. The right hon. and learned Gentleman asked three specific questions on this subject, one of which appeared on the Order Paper today. My hon. Friend the Joint Parliamentary Secretary, who answered that Question, will deal later with the three points raised by the right hon. and learned Gentleman.
The right hon. and learned Gentleman expressed concern, which we all feel, at the high level of interest rates. I wish to put the building societies' rates in a more general context. We agree entirely that there are strong objections to high interest rates, which increase housing costs, industrial costs, and the cost of servicing public sector debt. The hard fact is, however, that high rates are necessary for the time being as a means of protecting the reserves.
In the short-term, and at the present stage of our economic recovery, we cannot unilaterally reduce our interest rates unless other countries reduce theirs. In the longer-term, the best hope for reducing our interest rates lies in getting the balance of payments right, thus removing the main cause of pressure on the reserves; and the Government are determined to achieve this.
I need hardly say that I regret as much as anyone that housing interest rates are high, but high interest rates are necessary at present to protect the reserves, and loans for house purchase can be financed only if the current rate is paid to the investors who provide the money for them. If building societies, or other bodies, offered less than the market rate they would not attract the funds they need to sustain the high level of building that we all want to see. I am glad that the building societies are now receiving more money than in the early months of the year and that the movement is confident of being able to lend £1,550 million this year.

Mr. A. P. Costain: Does the right hon. Gentleman think that his right hon. Friend made the position clear and dealt with these fundamental facts concerning mortgages when he made his stupid promise of low mortgage rates?

Mr. Greenwood: My right hon. Friend did not make a stupid promise about mortgage rates. We have carried out the pledge we gave. We promised to reduce the rate of interest paid by people in the lower income groups.

Mr. Rippon: The right hon. Gentleman surely agrees that the Prime Minister clearly promised 100 per cent. mortgages and low interest rates for all and said he hoped that that would benefit all mortgagors.

Mr. Greenwood: I do not recall such a far-reaching statement having been made.

Mr. Rippon: It was.

Mr. Greenwood: If the hon. Gentleman who will wind up the debate for the Opposition wishes to deploy that in his speech, I shall listen to it with interest.
Some house buyers may need a bridging loan and some builders rely on loans to tide them over between the purchase of the site and the completion of the house. Bank lending for housebuilding and bridging loans for house purchase are categories of lending which fall below the priority categories of lending which will help the balance of payments, but are not specifically mentioned in the Bank of England's latest guidance to banks as needing to be reduced. It is too early to say what the effect will be on specific borrowers, but the banks continue to have full discretion to decide the distribution of their lending within the ceiling. I hope that I have said enough to demonstrate that we believe in encouraging home ownership. We have taken positive action to encourage it.

Mr. Rippon: May I just put the record straight for the Minister? The Prime Minister said in his election address in 1964:
100 per cent. mortgages, lower interest rates, and cheaper loan charges will help those who wish to buy.
That was quoted in the debate of 15 th December 1966, at column 682, if the Minister cares to check it.

Mr. Greenwood: That is not nearly so wide-reaching as the right hon. and learned Gentleman originally said. Of course, they do help them, and that is exactly what we have done; we have helped the categories to which my right hon. Friend the Prime Minister referred.
I believe that the time is right for further development of our policies to help home ownership. There is, as I have said, a strong demand for home ownership, and that demand we have fostered and encouraged. I am glad that the party opposite agrees with me that many families at present renting houses from a local authority wish to own a home of their own, but, equally, there are many families living in slums, overcrowded or sharing.

who cannot afford to buy, and must rent a house.
We believe that both these needs must be met. The Opposition seem only too willing to forget the second. There is at present no significant source of new rented housing other than the houses provided by councils. Yet some Tory-controlled councils, encouraged by their national leaders, are seeking to reduce the supply by selling off part of their stock of rented houses and so reducing the chances of those who must rent getting a decent house.
In the circular which I issued in March 1967, I gave clear guidance to authorities about the sale of council houses. I said that it would be wrong for there to be large scale sales in areas where there is a pressing social need for more rented housing. To do so would postpone the time when an adequate supply of rented housing becomes available. Moreover, the sale of a substantial number of older houses and their replacement by new houses to let could have the effect of unnecessarily increasing rates or rents, or both. I am sorry to say that some local authorities have not complied with the spirit of that circular, and have spent large sums of money on popularising the sale of their council houses regardless, apparently, of the needs of the many thousands of people on their waiting lists.
The House will be interested to note that this policy of Conservative councils has come under strong attack, not only from Labour groups but also from the private builders. They have criticised the policy, both in letters to the Press, from the President of the Federation of Registered House Builders, and in representations from that body to me. They have said that not only does sale reduce the pool of houses for letting, but that a house sold has to be replaced by an expensive new house, raising both rents and the cost to the Exchequer.
I have come to the conclusion that this dissipation of public assets must be brought under control. I accept that in some areas where, because of our successful large programme of new building, pressures have eased, a few sales do no harm, but in the areas of greatest demand sales on more than a minimum scale ought not to be allowed.
I have, therefore, decided that in the four conurbations of Greater London, the


West Midlands, South East Lancashire and Merseyside, sales should be limited to a quarter of 1 per cent. of the total housing stock in any one year. A circular modifying the general consent, to take effect from 1st August this year, will shortly be issued.
This does not mean that we are disregarding the wishes of those council tenants who want to become home owners. I know that many do, and that many have the resources to make their desires effective. There is a double benefit in this, for if such a family moves to its own house it releases a house for letting to a family in need who cannot afford to buy. I am accordingly studying proposals which have been made to me that, where such tenants wish to move to a house of their own, the council should have power to help with removal costs and perhaps also with legal expenses.
I come now to the question of local authority home loans, to which the right hon. and learned Gentleman referred. As I have said, in 1960 the building societies advanced £558 million, and this year they expect to lend £1,550 million. We can expect their ability to lend to continue to grow, whatever the temporary fluctuations in their current borrowing. They have a steadily expanding supply of funds from the repayment of principal on their outstanding mortgages, and I share their confidence that they will be able to make an ever-growing contribution to the finance of house ownership.
I have, therefore, been reviewing the function of local authorities in this field. The vast majority of councils operate only on a very modest scale. About two-thirds of lending is carried out by no more than 54 authorities whose activities are very localised. They provide nothing like the nation-wide service of the building societies, and the main distinction between the practice of local authorities and other lenders has vanished with the introduction of our mortgage guarantee scheme.
I have, therefore, decided, in view of the continuing call for restraint in public expenditure and the need to concentrate resources on discharging the main housing tasks, that this less essential service ought to be conducted on a more modest scale, and that the local authorities'

quotas for lending this year should be reduced to about 80 per cent. of the sums originally envisaged. I shall, of course, be keeping the operation of this service under review. I shall most strongly urge councils to concentrate their lending on assisting persons whose need cannot be met elsewhere. In particular, they should concentrate on council tenants who wish to move, to enable them to buy privately and thus release accommodation for those in need.
This, I am sure, is a more useful and effective way of helping, and more in accordance with the wishes of council tenants who wish to become owner-occupiers than the unwise policy of reducing the pool of houses available for renting. I am issuing a circular tomorrow explaining the new arrangements in more detail.
I have spoken already of the steps which we have taken to protect owner-occupiers from the jerry-builder. I should be less than human if I did not draw the House's attention to yet another way in which we have set out to give owner-occupiers protection and help which the Opposition consistently denied them during their period of office.
In our White Paper "Old Houses into New Homes" we have taken two further steps to help owner-occupiers. We propose to increase the standard grant for improvement from £155 to £200 and the discretionary grant from £400 to £1,000. As a result of this, many owners will be able to live in a degree of comfort which in the past they never thought possible.
Secondly, we are ending the monstrously unjust situation under which owner-occupiers whose houses are demolished under a clearance scheme get far less than the real value of their house. Under our scheme they will be entitled to supplementary payments over and above site value, which has hitherto been the normal basis of compensation. In effect, they will at least get the market value of their house. I am amazed that the right hon. and learned Gentleman and his hon. Friends tolerated this blatant injustice for so long.
I suppose that the Opposition, having run away from the opportunity of having a debate on the economic situation—a debate which we should have greatly enjoyed—had to find some other subject to take up the time. They could hardly


have chosen a subject more welcome to us than the question of home ownership.
We have built far more homes for owner-occupiers than the Conservative Party did during a similar period. We have raised the total house-building programme to a level which the right hon. and learned Gentleman did not believe was possible. We have helped would-be buyers with the option mortgage guarantee scheme—something which the Tories never thought of doing. We have waged an effective campaign against the jerry-builders. We are introducing very generous changes in the level of improvement grants, to the great benefit of many owner-occupiers, and we are ending the injustice of site value compensation, with all that it has meant in hardship to owner-occupiers, many of them old and many of them only with modest means.
It is a record of which we on this side of the House are proud. It is one to which I am glad to have been able to contribute, and one which I am happy to defend today.

5.0 p.m.

Mr. David Waddington: If I may crave the indulgence of the House, I should like at the outset to pay a tribute to my predecessor at Nelson and Colne. One thing he certainly had was political courage. There were, perhaps, not many occasions when I agreed wholeheartedly with the political opinions which he expressed, but I always admired the completely fearless way in which he expressed them. I am sure that the House will long remember his relentless campaign to bring about the end of capital punishment.
I trust that the House will also bear with me for a little time while I speak about my division. I do not think that there are many hon. Members—excluding, of course, the right hon. Gentleman the Minister of Housing and Local Government—who know very well that part of the world. I find that many people in London imagine that it is a very bleak, drab and damp place in the centre of industrial Lancashire with very little to commend it. The recent by-election in Nelson and Colne may at least have educated many of the journalists who then visited our town.
The division is, in fact, a very grand place in which to live and work. One

has only to travel for a very few minutes from the centres of our towns and one is in the most beautiful unspoilt countryside. Beyond that, a very great deal has been done in recent years to improve the amenities of the towns. Thus they are no longer composed of serried ranks of "Coronation Streets", and no longer do those towns lack all amenities. I understand that not long ago hon. Members received from the local paper a coloured supplement which set out in great detail how good a place it was in which to live and work.
In recent years we have been confronted with very real and special problems, first of all because of the contraction of the cotton textile industry and, secondly, because of the very strong—and, as I believe, far too strong—inducements offered by the Government to industry to go to the development areas, which are not so very far from the boundaries of the Nelson and Colne division. This is a subject about which I hope I may have an opportunity to speak on another occasion.
On this occasion I must direct my attention to housing, and it is right to say that even there our part of the world has its special problems. It is interesting to note that although over England as a whole about 48·5 per cent. of all dwellings are owner occupied, the figure in Colne is 62·1 per cent. and in Nelson it is no less than 72·3 per cent. There must therefore be many people in Nelson and Colne who are extremely disturbed at the high level of the mortgage interest rates, and I hope that I am not being too controversial in a maiden speech in saying that I am bitterly disappointed at the non-fulfilment of the election promise of 3 per cent. mortgages. I suppose that the non-fulfilment is partly responsible for my presence in this Chamber now.
There are two or three specific points that I should like to make. What we all want, of course, is an end to the crisis conditions in which we have lived since 1964 so that we can move away from crisis rates of interest and thus allow the mortgage interest rates to fall. Obviously, however, the crisis will not end in the twinkling of an eye—indeed, I doubt very much whether it will end before the end of this Parliament.
In those circumstances, therefore, it cannot be in anyone's interest for the


Government to try—and I hope that they will no: seek to do so—to prevent the building societies from charging such a rate of interest as will enable them to pay investors what is necessary to pay them in order to get the money needed in the movement. At the moment, I understand that at least twice as many people are wanting mortgages as the societies can provide for, and the Government are not providing a service to those people who are waiting in the queue— and it is often people with the more slender means who are waiting in the queue and who have not yet been provided for—when they carp at and try to prevent increases in the mortgage rate.
Secondly, I consider—as does my right hon. and learned Friend the Member for Hexham (Mr. Rippon)—the mortgage option scheme to have been a monumental flop. Only 10 per cent. of new borrowers have opted, and the reason is quite obvious. One needs a crystal ball to know whether or not it will be to one's ultimate benefit to opt into the scheme. One has to bear in mind the possibility of the standard rate of Income Tax going up, in which case the benefit of mortgage option will diminish. One has also to bear in mind the unlikely eventuality of the standard rate of Income Tax coming down. One has to bear in mind that one's earnings may increase, but one has also to bear in mind that one's earnings may increase, but one has also to bear in mind the possibility that one may encounter trouble and one's earnings decrease.
One has to bear in mind that after one has opted for the scheme the Government may, as the Government have done this year, increase family allowances and draw more people into the tax net. Perhaps—one never knows—the day may arrive when the mortgage interest rate will drop below 6 per cent. when, again, the advantages of having opted into the scheme will diminish. One really has to bear in mind the innate optimism of the British working man which must in itself militate against the success of the scheme. It is a rare bird who does not hope that either through his own efforts or good fortune—by winning the pools, perhaps—his means will increase, yet he now has to make the best calculation he

can of his ultimate prospects and earnings.
One has to recognise also that the booklet advertising the scheme is very complicated as, indeed, it must be because of the complicated calculations that have to be made when a man is deciding whether or not the scheme will be to his benefit. There must be some better way of giving help to those with smaller means, and perhaps in the long run if not in the short run we should consider allowing everyone, whatever his means and whether he pays the standard rate of Income Tax or a lower rate, the right to withhold the equivalent of tax at standard rate in respect of mortgage interest payments.
I finish with a positive suggestion for the encouragement of home ownership. I think that the best incentive and the best way of encouraging people to improve their own homes would be by the introduction of some sort of tax allowance for improvement. Not only would that be a positive encouragement to home ownership, but it would also have one very beneficial side effect. One would remove a lot of the built in antagonism to re-rating and make more sense of the rating system if people knew that they could spend up to the annual value of their houses on repairs and improvements and get tax relief on those sums.
I hope that I have not trespassed for too long on the time of the House, and I am grateful for the patient way in which hon. Members have listened to me.

5.10 p.m.

Mr. W. S. Hilton: Quite a number of hon. Members are experts either by their own choosing in certain subjects or simply because their constituencies demand that they concentrate on interests such as agriculture, fisheries or industry. Most of us, however, have a housing problem, and constituents are very fortunate if they have an hon. Member who is able to put forward their housing problems succinctly, with clarity and understanding. The constituents of Nelson and Colne, after reading the speech which has just been made by the hon. Member for that constituency (Mr. Waddington), will feel with some justification that they have someone who understands their problems and will be


able to put them in this House with great clarity and effectiveness.
I have rather mixed feelings, of course, in congratulating him, as a new Member of this House, on his maiden speech. It is a rather bitter-sweet duty for me because we on these benches obviously would have hoped to retain the seat for this side of the House but I was very impressed with the fulsome tribute he paid to his predecessor. We all appreciated his objectivity in that matter, just as we appreciated the opinions he expressed in the other matters he brought before us. While I listened to him I rather got the feeling that we must be in telepathic communication because some of the things he said I intended to deal with. I do not know whether that will be taken as a compliment, but I am sure that we all listened to him with great interest and we shall always be interested to hear what he says in our debates whenever we discuss housing.
One thing he stated none of us can deny. This was that high interest rates we have to suffer at any time are usually due to the fact that the economy at that moment is unstable. It is not only interest on mortgage rates but interest on everything which goes up in such circumstances. I was very surprised that the right hon. and learned Member for Hexham (Mr. Rippon) made the speech he did in view of this central fact. I am sorry that he is not present now because I intend to say one or two things about his speech. He knows I have a great respect for him in relation to his work when he was a Minister in a Conservative Government, but, having listened to his speech today, I have the feeling that he is not the same man at all; that he apparently did not enter politics until 1964.
Surely when one is moving a censure Motion and wishes to attack a Government one does so partly because of pride in one's own past Government record and the fact that it successfully redeemed its promises while the other lot failed and are deserving of censure. But the right hon. and learned Gentleman said nothing about pre-1964; yet the party opposite has always been a great sponsor of owner-occupation. Hon. Members opposite are the people who avowed their desire to promote a property-owning

democracy in this country. But there are people who took up mortgages in 1951–52 at the start of the Conservative administration and, during the financial crisis of 1957–58, found their interest rate was going up to 7 per cent. and they had a tremendous burden on their backs as a result. We heard nothing of this from the right hon. and learned Gentleman. He must realise, however, that he has been wielding a two-handled sword in this debate. The more he tries to say that the present increase in interest rates is a breaking faith with electors in comparison with promises given, the greater wounds he inflicts on past Conservative Administrations because this also happened under them.
I do not make these points because I want this to be a partisan debate. I am bitterly disappointed with the contribution the right hon. and learned Gentleman made because today we have an opportunuity to discuss the real problems of owner-occupiers and we do not often have such an opportunity. Even when the right hon. and learned Genleman moved on to suggestions about what could be done to improve the situation, he missed what I consider to be the central core of thinking on this problem, that not all owner-occupiers suffer from the impact of higher interest in exactly the same degree. He therefore made several suggestions for general improvements towards helping owner-occupation— making land cheaper and cutting building costs among them—but that would not significantly help many owner-occupiers who are already in the situation that their income is so low in relation to family responsibilities that they do not pay Income Tax.
Does the House realise that there are considerable numbers of owner-occupiers who real income increases every time the mortgage interest rate rises? At one end of the scale this is the position. Under the interest adjustment clause in a mortgage one has the right to pay the same total amount in repayment accepting that when the interest goes up the period of the mortgage will extend. Consequently what happens is that a greater part of the repayment is taken for interest and one receives a higher allowance from the Inland Revenue. We then have the paradox that real income increases as a result of an increase in the interest rate.
At the other end of the scale there are people who get no relief on this at all simply because they are not paying Income Tax. The flaw in the Income Tax relief scheme for owner-occupiers is the same flaw as exists at any time when we are trying to help people by the negative Income Tax system. Those who are worse off get very little and those who are better off get most aid. The inequities that exist among owner-occupiers due to trying to help them by tax reliefs are very much greater than the inequities that presently exist among the tenants of local authorities in relation to rents they pay and subsidies they receive. Yet outside this House and inside we are constantly discussing local authority tenants, the rents they pay and their subsidies to try and devise fairer schemes. Yet rarely do we have an opportunity of discussing owner-occupiers and attempting to achieve greater equity for them.
That is why I am grateful to the Opposition for raising this matter today so that we have an opportunity of providing solutions to the problem. I say "solutions" because I should think it a waste of the time of the House today to pursue sterile political arguments on either side when we have a chance of getting to grips with the anomalies and making suggestions to get rid of them and bring about greater equity. The level of a mortgagee's income at present determines the amount of help he is to receive instead of our giving positive Government help to all owner occupiers much along the lines as was suggested by the hon. Member for Nelson and Colne.
On one point I must agree with the right hon. and learned Member for Hexham, and this is that the option mortgage scheme has not met with anything like the success we hoped it would have when we discussed it on the Housing Subsidies Bill. This is not necessarily the fault of the Government. The Government tried to devise a scheme which would be of assistance to owner-occupiers with low incomes. It was a genuine attempt. For all the fire and fury attempted to be generated by the right hon. and learned Gentleman it should be remembered that not once in 13 years did hon. Members opposite even dream of bringing anything like the Option Mortgage Scheme into existence.

However, it has one great flaw in that it asks the owner-occupier to gamble perhaps for 20 years ahead. I do not think that in the provision of something which is socially necessary we should ask anyone to gamble. We must therefore seriously consider the option mortgage scheme and try to discover where we have fallen down and perhaps devise a better method of helping owner occupiers before the position greatly worsens.
I want to put forward for my right hon. Friend's consideration my suggestions for what might be done. Throughout the years the House has not clearly realised the positive weapon which we have in the Inland Revenue mechanism for giving social aid. Every time we have tried to do anything to help people, such as by allowances in relation to personal responsibilities, it has always been on a negative basis so that those on low incomes did not benefit.
We must try to ensure that the Inland Revenue acts in a positive way to help owner-occupiers, but it must act in such a way that those with the lowest incomes will also receive assistance. As I understand it—the Minister will be able to verify this—at present the total net relief which the average owner-occupier receives—this is in £s, not the amount of relief allowed against Income Tax—is £31; in other words, he is £31 better off as a result of his being able to set his (mortgage interest against his Income Tax. The theory is then that some owner-occupiers get nothing and some get £62. Some get more. Why cannot we decide that £31 is the amount that we want to give owner-occupiers as a direct Government subsidy? Why allow the pure incidence of incomes of owner-occupiers to determine the level of assistance they receive?
Let us suppose it was decided that £31 was a reasonable amount. Then allbona fide occupiers—I do not believe in convenience owner-occupiers who would do this to get advantage of the subsidy —would be treated as if each year they had made a payment of £31 in Income Tax. At the end of the year owner-occupiers would receive their Income Tax assessment. An owner-occupier with a large income who was assessed to pay, say, £180 in tax for the year would pay that amount minus the £31 which he had


notionally already paid; so in that way he would get his £31 subsidy.
It is important to realise that, if this subsidy is regarded as a payment of Income Tax actually made, at the other end of the scale the man with family responsibilities on a low income and who has paid no Income Tax would be treated as if he had made an over-payment of £31, and the Inland Revenue would have to send him a warrant for that amount. Again an owner-occupier due to pay £10 in tax would receive a warrant for £21 as a rebate. I do not suggest that this in detail is the scheme which should be adopted. However, this is the type of suggestion which I would hope would arise from this debate.
I believe that the Inland Revenue could be used in this way to implement a scheme for the benefit of owner-occupiers. With this scheme there would be an adjustment automatically every year to suit the changing income of the individual and his changing family responsibilities. There would be no question of a gamble as there is at present under the option mortgage scheme.
We often talk about means tests. Many of our schemes tend to founder because people do not like filling in many forms. However, people have to fill in a form stating the number of their dependants for Income Tax purposes. It is the one annual Income Tax form to be completed and the one annual test of means. The scheme I have suggested should commend itself to my right hon. Friend simply because we should be utilising something which already exists; there would be no extra charge to the Exchequer; we would be using the Revenue in a positive rather than in a negative way.

Mr. Costain: Does the hon. Gentleman suggest that the £31 should be allowed whether or not a person has a mortgage? Would someone who owns two houses get £62?

Mr. Hilton: These are details which would have to be thought out in the operation of the scheme. My right hon. Friend would have to check with the building societies to ensure that a genuine mortgage was in existence. By an owner-occupier, however, I mean someone who owns the house in which he lives. I do not contend that my suggested scheme

would be a panacea for all time and that there would not be problems to be ironed out. It is time, however, that there was a general recognition that not all owner-occupiers feel the impact of high interest rates to the same degree. Unless we discriminate in the help we give, we shall be failing in our duty to them.
I do not expect the Minister to answer in detail the points I have raised, but if he can give an assurance that as a result of this debate he will take these ideas back to the Ministry and will not kick them out perfunctorily without studying them we shall all be able to say, as my right hon. Friend has already said, that we are delighted that this debate was initiated.

5.27 p.m.

Mr. Walter Clegg: It is many years since Conservative Members were able to welcome to their ranks a Member from Nelson and Colne. It has been well worth our waiting. My hon. Friend the Member for Nelson and Colne (Mr. Waddington) showed his knowledge and love of his constituency, because it is a part of the world that he knows very well. As I am a local boy, it is particularly pleasant for me to be able to welcome another local boy to the House and to express the hope that he will take part in our housing debates in the future.
As always, I found the contribution of the hon. Member for Bethnal Green (Mr. Hilton) very interesting. I had difficulty in following the ramifications of his proposed scheme. It would give rise to practical problems. As I understood it, there was to be one allowance for all borrowers; it would be worked out on a mean figure, and it would be general over the country. This would be unfair and dangerous, because house prices vary from area to area. A man living in London or the South-East would have to have a much larger mortgage than someone living in Lancashire. It would be wrong that he should get only the same allowance of £31.

Mr. Hilton: I admit that there would be anomalies, but does not the hon. Gentleman realise that the problems which he suggests would arise under my scheme already arise in the aid we now offer? I am trying to refine it a little more.

Mr. Clegg: I agree that there are anomalies, and there has been a general desire on both sides of the House to help the owner-occupier who does not pay Income Tax. The method to which the hon. Gentleman referred, that is, using the Inland Revenue in a positive way, has been proposed not only in the housing context but in the general social security context as well, and it may well be that we shall have to wait for a general review of social security before we find an answer of the problem of helping the man who does not pay Income Tax.
The Minister made a complacent speech today. No Minister of Housing, whatever his party, can afford to be complacent when faced with the housing problems which this country has, but it seemed to me that, for a large part, the right hon. Gentleman's speech was little more than a series of pats on his own back. There is great cause for concern and there are many problems to which he ought to be paying attention. For example, there is the imbalance now developing between public sector housing and private owner-occupier housing. I notice something of a Pavlovian reaction on the benches opposite, particularly those behind the right hon. Gentleman, when this question is discussed. Public sector housing seems to receive general approval, while private sector housing is not regarded in the same way.
What worries me about the balance between the two sectors which is being deliberately created as an act of policy is that, with each extension of the public housing sector, we are building up a more rigid society. What does the council tenant have? He does not have much legal security. He holds his council house at the whim of the local authority; he is not protected as a tenant of private property is. His tenancy depends upon the good will of the housing committee. But, more important than that, it is very difficult for him to move.
Every hon. Member must have come across this problem time after time. After years on the housing list, someone is given a council house. It is likely that it will be his home for the rest of his life, much though he may wish to move at some time. The council tenant cannot just arrange an exchange with another council tenant who, perhaps, has a

smaller house. It all has to be filtered back through the local authority and be approved by the housing committee. All this tends to create an excessively rigid pattern in our society.
The problem of moving from a council house in one part of the country to a council house in another is even more difficult, if not impossible of solution. I have in the past made some suggestions for overcoming the difficulties, but I am beginning to think that they are overwhelming in the practical sense. What we ought to do—this is what the Minister should be boasting about—is make a real extension in the private sector. Any man who owns his own house is far more free to move if his job calls him to another part of the country; he can sell his home and buy another. But a man in a council house is greatly restricted in his freedom to move elsewhere, and sometimes he may even be unable to move and take up a new job.
I was astonished at the action which the Minister is taking about the sale of council houses by local authorities. It is an intolerable interference with the independence of local authorities and contrary to democratic principle. Many Conservative councils were returned after it was made clear that this was to be their policy. They won sweeping victories, which put them into power, on the basis that they would pursue a policy of selling council houses, yet now the veto is put on from Whitehall. The implication is serious. In one region after another, it is constantly said that there is too much power at the centre. We are constantly asked by local authorities and others in the regions, particularly in Scotland and Wales, as we well know, that more authority should be devolved. But the limitation which the Minister is putting on the sale of council houses is rule from the centre.
We shall never have really good local government until we have real local responsibility. If the Minister does not like the sale of council houses, it is not for him to make rulings. The answer to the problem, if he sees it as a problem, is for the people who elected the local authorities to throw them out at the next election if they do not like what they are doing. If the Minister's present attitude is to be perpetuated, whatever may be


done by the present or a subsequent Government after the report of the Royal Commission will be a waste of time.
The Minister seemed to think that the Prime Minister had made no promises about private sector housing or that, if he had, they were limited. In fact, on 10th October, 1964, in a party political broadcast, the Prime Minister said:
We believe that the Government should act positively to help owner-occupiers by lowering interest rates and, of course, to help them with cheaper land.
Interest rates have been dealt with fully in the debate so far, and I shall not repeat the argument. I want to say something about cheaper land.
A clear promise was made about cheaper land, and the Government's chosen instrument for the purpose was the Land Commission and the betterment levy. The great cry went out—and people believed it, no doubt—that the speculator would be hammered and that the new organisation would provide cheaper land. From the very beginning, we on this side said that, far from decreasing the price of land, the betterment levy would raise it, and we had support in that argument from the hon. Member for Rugby (Mr. William Price).
I can speak with practical experience in this matter as a solicitor dealing with the sale of building land. Vendors are adding the levy to the purchase price, and builders are paying it. The builder does not mind paying because he will pass it on. The man who ultimately pays the levy which goes to the Treasury is the purchaser of the new house. We said that it would happen, and it has happened in practice. It is difficult to isolate the increasing price due to this one measure alone, but that it has had some influence I am convinced from my own experience and that of colleagues in the legal profession who have told me the same.
A man goes to his solicitor and says, "I have a piece of land, with planning permission, and I want to sell. I want £X for it". The solicitor explains that there is the levy to be paid. The vendor asks, "what levy?", and then, after the solicitor has told him all about it, Be says that instead of £X he wants £X plus Y, that is, including the amount of the levy. When the land is put on the market, the builder buys at that price. It is as simple as that.
The machinery which the Government set up to redeem the Prime Minister's promise has done the very opposite of what they hoped and will continue to do the opposite. One cannot take a levy and pay it to the Treasury and hope that it will bring the price of land down. No tax ever brought the price of anything down. So that is another promise which the Government have failed to redeem.
There is another side to the operations of the Land Commission which should be noted. The argument advanced for the Commission—and there had to be an argument, expensive thing that it is—was that land was being held back by speculators and that the new system would force land out of the speculator's hands and on to the market as a result of the compulsory purchase powers. We said at the time that that was not the reason for the shortage of land or the high price but that what was wrong was the planning system in this country, and that this was creating the shortage of land.
What happened? The Land Commission went out looking for land to buy and it found the very situation which we had described. It is not speculators who are holding land back. Shortage of planning permission's is holding land back. The Government could have achieved a better result by making a change in planning procedures—in fairness to them, they brought in the Town and Country Planning Bill—and they could have avoided setting up an expensive agency like the Land Commission. If they had wanted to raise a tax on land profits, they could easily have done it without the monster which they have now created, and created on a false premise.
We shall miss the whole point of the land shortage and land values unless we have a positive drive to provide more land for builders to develop and shake out all the old permissions, or many of them, as the new Act will enable us to do. But, more than that, there must be positive planning. The planner must go out and look for land instead of waiting for applications to come to him and then either approving or disapproving them.
If that had been done, we could have avoided the expense of the Land Commission and the millions a year needed to run it. As was said at Question Time today, the Land Commission is now being


used as a stalking horse by builders. Some say, "Unless you sell me this piece of land, I shall go to the Land Commission and get them to use a C.P.O." Others might go to the Land Commission first and then say, "I have been to the Land Commission, and it is interested." Some of the owners of the land may, like a constituent of mine, have thriving businesses on it. So pestered was my constituent by this kind of threat being made to him that he told me, "The only thing missing from the front of the Land Commission Act is the swastika." I am sure that the Act was not meant to work in this way, but we must judge it in practice.
There is not a great deal of time available for the debate. I think that the Minister was far too complacent. I believe that he under-estimates the bitterness which the failure of the Government's promises has caused among the people, and if he continues to be complacent we shall not get the results which the country needs. What the country needs is a great expansion in the private housing sector.

5.42 p.m.

Mr. John Fraser: In their home ownership programme, the Government have little to apologise for. There is no need for them to be defensive about it. The Motion talks about "discouraging" home ownership. In 1965, for both old and new houses, 386,000 loans were taken up. In 1966, 461,000 were taken up. In 1967, the figure was 504,000. In the first quarter of 1968, the figure was running at nearly 600,000 for the year. That hardly suggests that the Government have been discouraging or hurting home ownership. In the last quarter of 1967, the total amount advanced by building societies was £411 million, a record. In the first quarter of 1968, the amount was £427 million, again a record.
The same trend is true of private house construction. In 1964—the last year of the Tory Government's programme—the number under construction was 174,000. Their previous best figure had been 149,000 in a year. The figure rose to 203,000 in 1965. It was 201,000 in 1966 and 189,000 in 1967—admittedly a drop. Nevertheless, this was still better than in any Tory year. At the beginning of 1968, there were 222,000 new houses

under construction. Whichever form of measurement one takes, the present Government have done better than the Tory Government did at any time during their period of office.
But the figures are even better than they appear on the surface. Following the Rent Act, 1967, many people—and as a solicitor I had personal experience of this—were forced on to the house purchase market who should never have been there. This was because they were faced either with eviction or with buying a house they did not want or could not afford. This is why the prices of private houses rose so sharply when the Act began to take effect. Now, people who should properly do so are able to get local authority houses or can remain in private accommodation at reasonable rents.
Then there is the question of the sale of council houses. There are many economic advantages in the sale of council houses. For example, the local authority is able to reduce its capital debt. As my right hon. Friend has pointed out, in areas where there is no housing need there is nothing particularly wrong in the sale of council houses. In an open market, there is no objection to selling council houses, giving a choice of renting or buying local authority accommodation.
But in a borough like mine, with 15,000 families on the waiting list, it is hard to justify the sale of council houses. It would be totally unjustified and would mean taking these houses out of the available resources for ever. There is, however, even in the Inner London area, need for local authorities to sell houses to people who have been moved from one area to another under clearance schemes. One of the difficulties is that, in such clearance, both owner-occupiers and tenants are affected. People like teachers, solicitors and assistant town clerks, who have tended to buy their own houses and would not get local authority rented accommodation, need to be catered for.
One of the results of the failure here is, for example, the situation in Tower Hamlets, which is denuded of teachers who live locally. They would like to buy their own houses and they cannot get local authority rented accommodation. Local authorities in these circumstances should take up the option arrangements for the sale of houses. This is a scheme whereby, when


the person to whom the house was sold in the first place wished to sell it again, it could be re-purchased by the local authority to be made available again to the some sort of person who needs such accommodation within the borough.
It is certainly disturbing that interest rates should have risen by 1⅜ per cent. since 1964, but between March, 1952, and July, 1956, interest rates on building society mortgages rose by 2 per cent. This is not something, therefore, for which the Government can be blamed. Economic circumstances make it necessary to have high rates of interest and I urge the Government not to interfere with building societies in exercising their discretion to raise interest rates, because lack of mortgage funds caused by not putting up interest rates at the right time distorts the housing programme and makes it difficult for builders and those developing estates to plan some time ahead.

Mr. Frederic Harris: Has not the hon. Gentleman missed the vital point that the Labour Party promised 3 per cent. mortgages?

Mr. Fraser: Some people like to believe that they read something in theDaily Express about what was said by my right hon. Friend the Member for Belper (Mr. George Brown) but are not prepared to quote it in full. I shall not go back to that quotation, which is rather longer than hon. Members are prepared to quote.
The Government have examined mortgage interest rates—something which the Conservative Party never did—by sending the whole issue to the Prices and Incomes Board. This has stimulated the building societies into taking a close look at their interest rates, liquidity and reserve position. The Building Societies Association is now considering the Hardie Report and this is being discussed by member societies. I hope that the Government will consider the possibility of giving help to the Building Societies Association by making changes in the law and practice of reserves and cash liquidity ratios. The present amount of building society funds is about £7,200 million, of which about £1,200 million is tied up in reserves and cash. If the Government could underwrite the liquidity position,

with no strings attached—because the building societies would on no account accept such strings—it might be possible to release from the present liquidity arrangements about £600 million for house purchase purposes, and this in turn might enable a small reduction in interest rates to be made.
At present the tax allowance on mortgage interest works inequitably. The scheme which we devised for the composite rate of interest paid to investors in building societies penalises the person who does not pay tax at the standard rate. The standard rate payer gets some advantage from investing in building societies, but the person who pays less than the standard rate receives some disadvantage. Luckily, this is not generally realised. If it were, I fear that investment in building societies might fall somewhat.
Apart from the mortgage option scheme, which I welcome, the person who pays a high amount of Income Tax gets the highest advantage, while the person who pays little or no Income Tax, even under the mortgage option scheme, gets a lesser advantage than, for example, the person paying Income Tax at the standard rate. It should be possible to have a composite charge, taking the average of all the tax allowances given, in exactly the same way as we have a composite rate of interest paid to all those who invest in building societies.
I come to some of the wider issues of home ownership. I suggest that the Government should adopt, as part of an economic as well as housing strategy, a further extention of home ownership, both in terms of new and old houses. I use the words "housing strategy" because I believe that home ownership is one way by which one can get people voluntarily to devote more money to housing generally. As the representative of a London constituency, time and again I have seen how people living in houses with controlled rents of quite low amounts are not prepared to improve those houses because they have no incentive to do so. The landlord is in exactly the same position and, for exactly the same reasons, he is not interested in carrying out repairs and alterations.
The result is that premises of this type tend to fall into disrepair, and a very


low amount of investment is put into them. When a house passes to the ownership of the tenant, almost immediately that tenant becomes prepared to devote more money to make the necessary improvements, no doubt because it is in his own interest so to do. In this way conflict is avoided between the landlord and tenant and one is using human nature to overcome an important housing problem.
This difficulty particularly applies in older areas. I hope that the Government's scheme for older houses proves successful. Older property being renovated by local authorities is an important aspect, but a greater degree of home ownership is the best answer because the owner occupier generally sets the pace in older areas.
I was sorry to hear my right hon. Friend's announcement about local authority loans. Perhaps I heard him incorrectly. If I did not, his announcement is to be regretted. I hope that local authorities, particularly in the London conurbations, will be given greater amounts to lend, particularly to purchasers of older houses, since in practice building societies will not make these loans.
As an innovation, I suggest that the Government should facilitate the sale of houses by landlords to existing tenants by guaranteeing an annuity to the landlord. For example, a house occupied by a statutory tenant may be worth £2,000. The Government should facilitate the transfer of that house from the landlord to the tenant by guaranteeing an annuity to the landlord. The landlord would, in effect, be selling the house on a 100 per cent. mortgage, but would be receiving a guarantee of repayment from the Government. This proposal has the support of many tenants and would facilitate the transfer of houses on controlled rents owned by landlords who in many cases do not require them.
In terms of economic strategy as individuals we devote far too little to housing, about 11 per cent. of personal expenditure—rather less than we spend on cars or tobacco and drink. We must increase this expenditure without forcing people to do so. A greater increase in home ownership would achieve that end. I suspect that an economic argument used by some people is that at a time of economic stringency we should

cut down the amount spent on home ownership and the funds made available for house purchase. This view is utterly wrong because if one buys a new house the import input is 10 per cent., while if one does not buy that house but spends the money on consumer goods in the shops, the import input is 20 per cent. There is, therefore, an economic advantage to be gained from greater home ownership and of harnessing human nature to make these import savings.
House ownership develops the habit of saving and investment. One of our troubles as a nation is that we spend more per capita on personal consumption than any other nation. We devote far too little on investment. By selling home ownership to a greater extent, we would achieve housing and economic advantages which the people so badly need, particularly in the London area.

5.58 p.m.

Mr. Eric Lubbock: The speech of the hon. Member for Norwood (Mr. John Fraser) was an interesting exposition of the state of home ownership today. I was glad to hear him advocate some measures which would encourage home ownership still further and I was particularly interested in his remarks about encouraging statutory tenants to buy their own homes because this is a lacuna in Government policy which should receive urgent attention.
I have a constituent who owns two houses. He is an involuntary landlord who would be delighted to divest himself of the responsibility, provided that the statutory tenants, who are at present paying small rents—in one case of about £1 and in the other of about 30s.—would buy those houses. It is obviously not in the interests of the statutory tenants to buy them as long as their rents are controlled at such low sums.
We should consider further means of encouraging people to take on the responsibility of home ownership, particularly as many of them live in controlled houses by accident and are in no sense in need. In other words, their incomes should not entitle them to pay the very low rents which enable those on extremely low incomes to live properly. There is an element of illogicality in our housing policy and subsidies when the


finances of the private landlord or the State are tied to the bricks and mortar and not to the personal needs of the tenant. So far we have been only tinkering with the problem and our housing policies have not tackled the fundamental problems. It is time that the Government addressed their minds to these urgent matters.
On the other hand, I disagree with many of the criticisms which were made by the right hon. and learned Member for Hexham (Mr. Rippon), and which were couched in rather extravagant terms. I can see that the Tory Party had to find a good substitute for the economic affairs debate, which did not take place in spite of the promises of the Leader of the Opposition, but I can also see how the Minister has welcomed this opportunity to say what the Government have been able to do about home ownership. At least we are forced to admit that in the last four years rather more has been done by the Labour Government than was done by the Tory Administration in the previous period. I do not go along with the generalised and sweeping criticisms which were made by the right hon. and learned Gentleman.
We all regret these very high mortgage interest rates, and those of us who have a high percentage of owner-occupiers in our constituencies can see the effects on the standard of living of our people—if they are paying more in interest on their mortgages, they have less to spend on other things and inevitably their standard of living declines. However, as the Minister pointed out, high interest rates are a product of the general economic situation, and to single out mortgages is to blind oneself to the fact that world interest rates generally have had to be maintained at a high level because of the international monetary situation. It is something which we all deplore, and we would all like them to be brought back to a more reasonable level, but that is not practicable in the present economic climate.
We hope that the measures taken to restore stability and to bring long-term backing to our reserve position will make it possible in the near future to do something about a general lowering of interest rates, but there is no use in going back over the remarks which may have been

made by the right hon. Member for Belper (Mr. George Brown) in the 1964 Election. We all know that he tends to say things out of turn from time to time and we do not attach any very great importance to his remarks. I do not think that any people were taken in by the hare, which he started, of 3 per cent. mortgages. If anyone believed that and voted Labour as a result of the so-called undertaking given by the right hon. Gentleman, he needs his head examined, and I do not think that many people did. Not many people in my constituency were taken in. They knew that it would be totally impracticable and that the sum required to finance a general lowering of rates of interest on mortgages to 3 per cent. would be astronomical and beyond the reach of any Government, even if it had not been faced with the difficulties which the Labour Administration had to face on taking office in 1964.

Mr. Roy Roebuck: I am sure that the hon. Gentleman does not want to be unfair to my right hon. Friend in his absence. My right hon. Friend strongly disputed the one account of the statement which he made about housing interest rates which appeared in a Sunday newspaper.

Mr. Lubbock: That is why I was not entering into a discussion of whether he actually said that interests rates would be lowered to 3 per cent. He certainly gave the impression that that would be the policy of the Government if Labour were elected. Certainly he gave that impression to theSunday Express reporter who was at that meeting. I was saying that it would be fruitless to go back over that and discuss what was or was not said, because we are facing a situation brought about by the general economic climate in the world. Even if we had had the most brilliant men in office during the last four years, the most extreme geniuses, it would have been impossible to bring mortgage interest rates down to anywhere near 3 per cent. If we are to be realistic about this matter, we start from that position.
What can be done to help home owners within the limits of the nation's resources? I do not think that the Government have done so badly as is sometimes pretended. Their first priority was to increase the number of houses to let,


so that there was a more reasonable balance between home ownership and houses to rent. We all know that the overwhelming number of housing cases which come to our advice bureaux in our constituencies are concerned with houses to rent and not with house purchase. That does not mean that people do not have difficulty about meeting their mortgage payments, but they are not so extreme as many of the sad histories to which we have to listen of serious overcrowding and of family break-ups and disputes caused by some of the appalling housing conditions in some major cities. The Government rightly gave priority to increasing the stock of houses to rent, while at the same time doing whatever could be achieved to encourage those who were capable of buying their own homes.
The mortgage option scheme is a step in the right direction, although not many borrowers have taken up this opportunity. However, the fact that 10 per cent. have done so shows that the scheme has brought home ownership within the reach of some individuals who would otherwise have been forced into the rental market, and this has diminished the pressure on council house accommodation and reduced the amount of capital expenditure which local authorities would have had to incur, not significantly perhaps, but still more than the Tories did when they were in office. Rather than hearing these generalised criticisms, I would be far more interested in knowing what the Tories would propose to do if they resumed office. In these debates the Tories adopt a rather negative attitude, only criticising the Government and not telling the House what they would do. Perhaps the hon. Member for Crosby (Mr. Graham Page) will bear that in mind when he winds up tonight.
I agree with the hon. Member for Norwood about the effect of taxation on mortgages and especially the fact that more tax relief is given in respect of the more expensive houses. This seems an anomaly, in that the encouragement of home ownership should be directed mainly towards those at the lower end of the income scale. If there is a larger market to be tapped and if there are many people who would like to own their own homes but who are unable to do so for financial reasons, we should remove some of the subsidies paid to the

"pop" stars who buy £30,000 houses and get the Income Tax relief on the interest they pay, and use the amount to help those at the bottom end of the scale, that is to say, the 10 per cent. who are going in for the mortgage option scheme.
A reverse kind of subsidy is now paid to those who are very rich. The higher up the scale one goes, the larger the benefit to be gained from the Income Tax system. This is something to which the Government should give attention as part of a fundamental review of the financial help given to home ownership. I should like a scheme to be initiated which would lead to a reversal of these subsidies with more payment to those at the lower end of the income scale.
I want finally to deal with the sale of council houses. I agree with the Minister that one must carefully distinguish between areas where a near balance between supply and demand is being achieved and where it is perfectly legitimate and desirable to sell council houses, as long as there is a demand for them, and those areas, such as the big conurbations, which are very far from achieving such a balance and where it will not be achieved for many years.
People imagine that in my constituency we are well off for housing, but about one-third of the cases which come to my advice bureau every week are concerned with applications for local authority accommodation. That indicates the size and importance of the problem in a fairly well endowed constituency. It is morally wrong to reduce the stock of houses available for letting by selling them to well-off people who can easily afford to buy them on the open market.
Certainly local authorities should build houses for sale to people who are already in their own lettings, so as to release that accommodation for others. They should also build them for sale to people on the waiting list if there are those who can afford to buy them, so as to relieve pressure and also to make room for others whose need is greater. I do not think that consciously and deliberately to reduce the amount of houses available for letting while there is this tremendous shortage is correct.
I would beg the Minister to carry on with the policy he has announced today of preventing those local authorities who have ignored this advice so far from


wantonly destroying the assets at present under their control. I do not feel that I can go along with the Conservative Party in the generalised and sweeping criticisms it has made of the Government's housing programme and therefore I shall recommend my hon. and right hon. Friend not to support it in the Division Lobby this evening.

6.10 p.m.

Mr. Hugh Rossi: There is little that I find more sickening than the cynicism of the Government over home-ownership and the lamentably complacent speech of the Minister this afternoon. It may be that he has mesmerised himself with the figures that he has juggled about the Floor of the House, but he has certainly not convinced the struggling young couples, desperately anxious to buy their own homes. They will not be convinced when they realise that they have to try to find a deposit out of an income which is being virtually taxed out of existence by the Government and, having scraped together the deposit—without the help of this 100 per cent. mortgage farce, which is worthless—find that the house they want is gradually receding from their reach as prices continue to rise.
House prices have risen under this Government by something like 35 per cent. It is easy to say that mortgage interest rates were governed by factors outside our control, but this was not the impression given in the country in the last two General Elections, whatever gloss may be put on the public statements made by the Prime Minister and the right hon. Member for Belper (Mr. George Brown). These are matters about which the country knows and no amount of gloss, manipulation or juggling in the House will convince them otherwise.
I do not know why the Labour Party is not being honest over this. It proclaims itself as the party of public ownership. That is what it passionately believes in. Its platform over the years has been the nationalisation of land. More recently it was the municipalisation of rented properties. These are the things for which it has fought in the last 25 years. It was only in 1964 and 1966, when the tacticians of the Party decided that it was necessary to woo the middle class—

Mr. Roebuck: Bunkum.

Mr. Rossi: —that in desiring to woo the middle classes it was decided that home ownership was fair game. A number of reckless and dishonest promises were made.

Mr. Roebuck: rose—

Mr. Rossi: I will not give way, we have very little time. The hon. Gentleman has only been in the Chamber for five minutes; I have been here the whole of the afternoon. We have heard promise after promise made by right hon. Gentlemen opposite.
We will cheapen the cost of housing by our interest rates policy.
That was the Prime Minister in Stevenage in September, 1964.
By intelligent monetary policies Labour will bring mortgages within the reach of young couples living on average incomes.
The Prime Minister again, at Sitting-bourne in September 1963. Where are those promises today? What young couples now consider that mortgages are being brought within their reach by the high interest rates that they now have to pay?
According to a very rough calculation that I have made, the recent increase in interest rates makes a £3,000 mortgage £830 dearer over a period of 25 years. This is the sort of thing that the Government's policies have brought about; this is that sort of thing that young married couples have to face. I revert to the policy of the Government over home-ownership. It is implicit in the way that they have been handling money. Local authorities have been continually operating under a "stop-go" policy on funds available for mortgage loans.
We are always being told that local authorities have had to suspend their mortgage loan scheme. Even today, in the right hon. Gentleman's speech, he told us again that there was to be another stoppage or suspension. At the same time local authorities can have what money they want in order to buy in property for their own use. There is no restriction on that, not even on properties not required for development purposes. Local authorities throughout the country have been encouraged by the Government to acquire odd properties here and there, whether or not required for a redevelopment scheme.
This policy has not added one single new unit of housing accommodation to the stock of the country—it has not provided one extra home. It has brought into public ownership more and more property, and at the same time, by drying up the mortgage sources, has prevented more and more people from buying their homes. This is the real policy of the Government, and this is why I say that their attitude towards home-ownership is the utmost sickening cynicism.
I accuse them of this and they stand condemned of it on their own policy. Today we have an even greater discouragement for people buying their own homes when we axe told that local authority policy based on local needs is to be interfered with again because they will not be able to sell properties to then-own tenants.
As to house prices, we know the effects that S.E.T. has had. It is a direct policy of the Government, and from this side of the House we have urged them time and time again to relieve the building industry from the tax. It adds something like £40 or £50 to the cost of a three-bedroom house. Is this an encouragement towards home-ownership? What has devaluation added? It has increased home prices. There has been no preference given at all to the building industry, to essential social services. The Minister has turned a blind eye. There has been no agitation on his part to exclude housing materials from these impositions, yet he talks about wanting to encourage home ownership.
Home prices have increased under the Labour Party's administration by 35 per cent. What has happened to the promises made before the last two General Elections, that the cost of housing and land would be brought down? These pledges have been broken. The British public has seen this and realises the truth. It does not require the right hon. Gentleman to come here and juggle with statistics to convince them otherwise. They will judge and criticise him on his complacent manner in approaching this grave social problem. He has done himself no good in approaching the problem in this way.
The right hon. Gentleman has adopted an "Anything you can do I can do better" attitude towards the previous

Conservative Administration. He has said that he has built more houses for home ownership than anyone else. He said that the Tory Party should look at its record. I have the statistics in front of me. In 1952, 34,605 houses were built for home ownership. That figure had gone up to 218,094 by 1964. [An HON. MEMBER: "What about 1963?"] There has been a progressive increase from 1953 to 1964. I do not wish to weary the House by reciting the figures, but the peak was reached in 1964, when over 218,000 houses for home ownership were built. Since 1964, there has been a progressive decline in the number of houses built for owner-occupation. In 1965, 213,000 were built; in 1964, 205,000 were built; in 1967, 200,000 were built. We are told that in 1968 200,000 will be built, but the starts this year are 32,000 down on last year. Therefore, next year the figure will have slid down again.

Mr. Costain: I hope that my hon. Friend will not let the Minister get away, as he tries to do, with what he says about 1963 when we had the coldest winter for a long time. No building was done for three months. The Government kept on using stupid arguments. We should show how wrong the Minister's arguments are.

Mr. Rossi: The figure for 1964 was only slightly up on the figure for 1962, but from 1952 until 1964 there was a continuing progression and a continuing decline from 1964 carried forward into next year, as the starts show.
These are the true figures, and the Minister should not juggle with selective statistics for his own benefit. He has no right to be complacent. He will stand judged, not on his words, but on his deeds. The people of this country know how easy it is to buy a house and to get a mortgage and to pay for it. On these facts, the right hon. Gentleman stands judged and condemned.

6.22 p.m.

Mr. Oscar Murton: The Minister is a man of considerable charm, but in his speech I thought that he overdid it to the point of complacency. Virtually half the houses in Great Brtain are owned by their occupants compared with the figure of 28 per cent. in 1953. This reflects much greater credit on the


last Conservative Administration than on anything which the present Administration has achieved in the last three and a half years.
Credit for this lies also with the building industry and the building society movement in the determined efforts which have been made to provide the necessary mortgage finance. Mr. Norman Griggs, the Secretary-General of the Building Societies Association, has forecast that his movement has expanded so rapidly during the last decade that if present progress is maintained it will outstrip and overtake the total assets of the joint stock banks.
That advance is conditioned entirely by the general financial climate of the country. There are signs that prospects are not reassuring. It is perhaps a truism to say that speculative house building —that is, the building of private houses for sale on the basis of market conditions and potential public demand—must of its nature be geared to and be affected by the general economic situation. We expect that about 215,000 houses will be completed in the private sector by the end of this year, but we must remember that from 1964 to 1967 inclusive there has been a steady fall in the stock of new housing from 58 per cent. to under 50 per cent. which has been caused, as we all know, by the restrictive financial policies of the Government.
Supporters of the Government may take gratification from the fact that for the first time there were indications of buoyancy in the private housing market in the early part of this year, but there are already signs of a downturn. There is considerable evidence that the consumer boom at the beginning of this year was reflected in a boom in housing. There is no doubt that the average man is frightened about the state of our money. He has preferred to put whatever money he could into something solid and to buy his home before the harsher measures which had been forecast overtook him. There has been a flight of money into ordinary shares, despite the fact that they show such a low return. There has been an unpturn in investment in unit trusts. On the other hand, there has been a downturn in investment in fixed interest stocks and in savings in building societies.
The building societies would face great difficulty if this movement were to

continue. Although they are managing to hold their own and to serve the country faithfully, if investment is removed from the building societies to any great extent —and there is no doubt that members of the public are beginning to use them as a form of banking from which they can quickly withdraw their money—they will have to increase their rates. If that happens, it will be a tragedy for the home owner. This is something to which the Government should pay due regard.
The way to prevent that from happening is to overhaul the economic capability of the country and to lower interest rates so that home ownership is made easier and the building societies are able to attract the money which they can lend to the small man to help him to buy the home which is his heart's desire.

6.28 p.m.

Mr. Roy Roebuck: I have been provoked into saying a few words by the speech of the hon. Member for Hornsey (Mr. Rossi), who, having blown up, has blown out. I apologise for not having been present during the earlier part of the debate, but I was engaged in other parliamentary duties, as the hon. Gentleman perhaps would have realised if he attended as diligently to his parliamentary duties as I do.
The hon. Gentleman suggested that the Government were building too few houses for home ownership and in the next breath complained that it was alien to the philosophy of the Labour Party that people should buy houses for home ownership. Therefore, I did not know what he meant. I wish to correct that view, because it has always been the policy of the Labour Party that people should be encouraged to own their own homes. One of the first benefits which the early trade unions provided for their members was the collection of money to enable people to buy houses in rotation.
It is absolutely false to suggest that we on this side of the House do not wish to encourage home ownership among all members of the community. [An HON. MEMBER: "But not among council tenants."] An hon. Member opposite says that we do not desire to encourage home ownership among council tenants. That is wrong. What we say is that there is a great need for rented accommodation, and we must look after those people who require


rented accommodation. But we desire to make easier the terms under which mortgages can be obtained so that those people can acquire houses of their own.
In that respect, the Government have done many excellent things. For instance, they have effectively reduced the mortgage interest rate payable by people who do not earn enough to benefit fully from Income Tax relief on mortgage interest payments. They have done a splendid job in house building, but there is no room for complacency. I should like the Government to do far more to encourage small builders to come together on a co-operative basis. Although the building industry, under the guidance of my right hon. Friends the Ministers of Housing and Local Government and Public Building and Works, has increased its productivity remarkably in the last year or two, far more could be done by getting small builders to work together co-operatively, possibly by buying machinery for their joint use, so that they can boost the building of houses.
I apologise for intervening in the debate when I had been present only a moment or two, but I was provoked to do so by the hon. Member for Hornsey, who most discourteously refused to give way.

6.30 p.m.

Mr. Graham Page: I should like, first, to offer my congratulations to my hon. Friend the Member for Nelson and Colne (Mr. Waddington), as other hon. Members have offered their congratulations to him, on a maiden speech the standard of which, I am sure, we all wish that we had achieved when making our own maiden speeches—and not only that, but a standard which we would like to have achieved in our subsequent speeches—I suppose one calls them "matron" speeches—in the House. If we all kept up to the standard set by my hon. Friend today, we should all be very happy and much more efficient Members.
The interesting point made by my hon. Friend about the very high percentage of owner-occupation of houses in his constituency was a justification of the choice of this subject for debate today. He gave us a searching analysis of the mortgage option scheme, which again justifies

this debate, because I hope that out of it will come a review of the mortgage option scheme which will make it more acceptable.
To my congratulations I wish to add a note of sympathy to the Parliamentary Private Secretary to the Minister of State of the Department which is answering this debate for his sudden illness. I hear that, since we saw him last night, the hon. Member for Norwich, North (Mr. Wallace) has been taken to hospital for an operation.
I must declare an interest, as is the custom in this House. I am a director of a building society, but I hope that that interest will enable me to give information to the House in a form which is up-to-date and knowledgeable. The recommended rates of mortgage interest —those recommended by the Building Societies Association—and the recommended rate of interest to investors are, as right hon. and hon. Members know, 7⅝ per cent. to be paid by borrowers and 4½ per cent. to be paid to investors.
I must say at once, however, that the 7⅝ per cent. covers only a very narrow range of building society business—for example, 75 per cent. advances on new houses. In some societies it covers a wider range, but I would say that the average rate of interest now paid by borrowers is not the recommended rate of 7⅝ per cent. but is nearer 8 per cent. on an average taken over all borrowers and not simply borrowers on new houses. Accordingly, the rate offered to investors in many societies is now greater than 4½ per cent.
It was correctly said in an interjection during the debate that the present rate offered by some societies to investors is 8½ per cent. gross when one takes into account that it is paid, to use the well-known phrase, free of Income Tax although it is not really tax-free. However, the position is bad enough for the borrowers on the recommended rate at 7⅝ per cent. At 7⅝ per cent., a borrower on an average mortgage—£3,000 for a 25-year term—pays 10s. more a week than he paid when a Conservative Government were last in office. He pays 30s. more a week than he would have been paying had he believed what was said by the right hon. Member for Belper (Mr. George Brown), or what he was reported to have said. That 10s. a week


applies if the borrower is lucky and is on a 7⅝per cent. mortgage. He is more likely to be paying about £1 a week more than he would have been paying in 1964. This is the measure of the increase of the rates of interest which are now being paid.
Building societies try to cushion this by leaving the instalments the same and extending the term of payment, but few things are more depressing to an owner or more discouraging to home ownership than to get one's mortgage repayment book at the end of the year and to find that, though the monthly instalments have been paid throughout the year, one has paid off only about £1 or £2 at the end of the year. This is most discouraging. In some cases, as a result of the high interest rates, the building societies have found that by extending the term there would not be any reduction in the amount owing at the end of the year.
Why should interest rates have gone to such a high level? Building societies have to pay sufficient to the investor to attract the money into the building society and to leave a margin, between what they pay the investor and what they receive from the borrower, sufficient to pay the liabilities. Here the Government come very much into the picture, and in a very harmful way.
The difference between £4 10s., the rate paid to the investor, and £7 12s. 6d., the money received from the borrower, has to be used in management expenses, which on average are 12s. 3d. of that margin, on Corporation Tax, on the composite rate of Income Tax and on maintaining reserves and liquidity.
The hon. Member for Norwood (Mr. John Fraser) said that the Government should in some way oblige the building societies to use the money which they keep for liquidity and should guarantee that liquidity in some way. That would be absolute folly. To direct building societies what reserves or liquidity they should keep would to attack them in a business which they know how to run. If they were to use up the money which they keep for liquidity, it would be a once-for-all operation. It can happen only once, and there is no advantage in that.
The Government's responsibility really falls in Corporation Tax, which takes a

substantial amount of that margin, and, in particular, in the composite rate of Income Tax. In 1964, this used to be 5s. l0d. It has gradually crept up to 6s. 3d. It is generally anticipated that that 6s. 3d. will go up in the next Budget. Because there is always a three months' gap between the increase in the rate to investors and the return which a building society gets from its borrowers, and because the building societies will be liable for any increase in this composite tax as from 1st January, they now anticipate—wisely, I think—that there may be, and almost certainly will be, a rise in the composite rate in the next Budget. If the Chancellor of the Exchequer could give an assurance that he has no intention of increasing that composite rate, that would be a factor in stabilising mortgage interest rates.
The Motion refers to the effect of higher interest rates. There is an effect not only on the payment of interest on the mortgage—the mortgage instalments —but on the availability of money to lend. A building society has to pay sufficient to its investors to attract money, and it has to compete against those who are offering rates similar to Bank Rate plus.
The volume of sales and purchases depends on the availability of building society funds. One ought to look ahead at least for the rest of this year to see how much should be available to deal with the expected production of new houses. I am a little more optimistic than the Minister on the number of private enterprise houses which will be completed this year. I would have thought that we should get up to 215,000. If that is so, how much do we need in building society funds to ensure that those completed houses do not lie empty? My calculations are that we ought for the rest of this year, to be getting into building societies £80 million a month, and I am very doubtful whether, in present circumstances, 4½ per cent. interest to investors will produce as much as £80 million a month.
It has not been easy to recover from November, 1967, to March, 1968, when there were massive withdrawals from the building societies—withdrawals, and a spending spree, because of devaluation, because of the squeeze in January last, and because of the threats of what might


happen in the Budget. Those massive withdrawals from the building societies at that time were a public vote of no confidence in the Government. People were taking their money out and spending it because they did not know what was going to happen to it in the Budget. I think there is bound to be difficulty in recovering from that in the rest of the year—unless we get that illusory economic miracle the Prime Minister talks about.
Some sales and purchases are not dependent on building society funds, but mainly it is always a chain of sales and purchases, a chain of people buying and selling their houses, and if one link in that chain cannot get a building society mortgage the whole chain collapses.
Another reason why the chain may break is that a bank refuses to give a bridging loan, and here the Government are responsible. We have been told by the Minister today of some new policy relating to bridging loans. What he assured the House, if I understood him correctly, was that that sort of loan is still not considered as priority for the banks—he said no more than that a bank might perhaps provide a bridging loan. Up to the present I have not found the banks are ready to do this even for the most substantial client.
These are practical obstacles which do cause hardship to the prospective house purchaser. As I have indicated in the last few sentences, perhaps I ought to declare another interest—as a practising solicitor.
In that connection, let me say that I regret that the Government, in their preoccupation with so-called reforms of steel and transport and taxation, have been unable to find the little time which would be necessary to reform the law of conveyancing, the law of selling and purchasing property, and thereby cutting down costs. In fact, as my right hon. and learned friend the Member for Hexham (Mr. Rippon) has said, they are doing just the opposite. They are increasing the costs of conveyancing by partially suspending the Land Registry. They have increased costs by such legislation as the Land Commission Act and the Leasehold Reform Act, and so they are making it more difficult for home owners to buy property.
It is little wonder that the housing waiting lists of local authorities get no shorter. As the hon. Gentleman the Member for Orpington (Mr. Lubbock) said, those who come to us in our advice bureaux or "surgeries" or whatever we like to call them, come for assistance in housing matters more than, perhaps, any other matter; they come to get our help, usually, I find, about their position on the housing waiting list, and, like other hon. Members, I am sure, I always tell them, "This is a matter for the local councillors".
But in going through the facts with them I sometimes find that here is a man earning £30 a week, or who has £35 going into the house a week, and I ask, "Why do you not save up and get a deposit and buy your own house? Why do you want to go on the councils waiting list?" He produces a little list of figures to show how impossible it is for him to do that out of his pay packet, out of which he has to meet rising prices for household goods and large sums for insurance contributions and so on. It really is extremely difficult, even for a man earning £30 a week to save up for a deposit.
A 100 per cent. mortgage may be available for some, but these men are usually the ones who are on rising incomes; it is no good their taking an option mortgage and therefore they cannot get a 100 per cent. mortgage. This is where this policy has gone wrong. How much would he have to save up? If a house cost £3,000 in 1964 it would be £4,000 now. That is the rise in house prices. Why? Because of the recent increases from devaluation, from S.E.T., and from the general policies of the Government. Then the constituent says "Suppose I have got a house. I have managed to save up the deposit and I have managed to find a building society which will advance the money to me, but look at the expenses I will have to meet in repairs and rates".
The Government have not carried out their promise to reduce the burden of rates to home owners. [HON. MEMBERS: "Oh. They have."] Oh, no. The rate rebate scheme has just scratched the surface, in the same way as the Option Mortgage Scheme. Of all building society borrowers 10 per cent. have taken advantage of the Option Mortgage Scheme,


and the percentage of people who have taken advantage of the rate rebate scheme really does not show that it is an advantage to home owners in general. On both these subjects, particularly the option mortgage, I appreciate the remarks of the hon. Gentleman the Member for Bethnal Green (Mr. Hilton), who said that the Government are asking a man to gamble for 20 years—if he takes up a Option Mortgage Scheme.
I hope that a review will result from this debate—perhaps an immediate review of the difficulties which have arisen out of the Finance Act. If I may offer a suggestion to the Minister about how he could solve this for those who have suffered from the Finance Act, I would suggest that they can escape from their option if they pay back the mortgage and take a fresh one from the same society. Perhaps the Government would pay the costs of that, since it is the Government's fault that the borrower has got into this difficulty.
It is no solution to all these problems to step up local authority building. It is no solution to shortening the waiting lists because the local authorities have already plenty of work to do in slum clearance, and it takes half as long again to build a council house as it does to build a private enterprise house. I think it is positively harmful to the total production of houses to force up the total quantity of council house building and to force down private enterprise building, as the Government have done over the past years.
Tonight we have been give two more damaging attacks on home ownership. First, forbidding the sale of more than an infinitesimal number of council houses in certain areas of the country—in major areas of the country. This really is a shocking interference with the right of the local authorities to decide their own needs in housing, and I think that the announcement which the Minister has made today will be a very great discouragement to home ownership in general and will be looked upon as an attack upon the local authorities in governing their affairs in their own districts.
The second attack on home ownership we have heard today is a reduction in the local authority home mortgages, denying the advantage which prospective house purchasers could obtain from borrowing

the money from local authorities to two out of 10 people who would get it under the present policy. With the hon. Member for Norwood, I regret this and I think that the Government are wholly wrong to reduce the money available for loans by local authorities by 20 per cent.
Here are two major discouragements to home ownership, and this in face of the desire for home ownership. It has now risen to 50 per cent. of all households and the statistics show that between 70 per cent. and 80 per cent. of the rest also want to own the house in which they live. Government policy should recognise that. As my right hon. and learned Friend said, the primary object should be to promote home ownership.
My hon. Friend the Member for Hornsey (Mr. Rossi) said that perhaps this Government would not do that because they did not believe in it, but at any rate the Government are so far from realising that that should be a prime object of policy, and have so failed to make that an object of policy, that perhaps there should be an independent body to advise them how to do it, perhaps a Home Ownership Advisory Council, something between the National Insurance Advisory Council and the Prices and Incomes Board.
The Minister spoke of the Joint Standing Working Party, but that does not seem to have been very effective in guiding him along the right lines for the home owner. Perhaps a politically independent body such as I suggest—a Home Ownership Advisory Council—would consider Government policy with a view to giving those of modest means a fair deal in home ownership. They have not yet had a fair deal under this Government.

6.52 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): It is very pleasant to be able to begin by paying a tribute to the hon. Member for Nelson and Colne (Mr. Waddington) for his extremely interesting maiden speech and for identifying himself with that group of us in the House to whom housing and local government are real and abiding interests and loyalties. I should also welcome him as joining that very select group of Lancashire Members. I also have an educational connection with him which, in these


post-Newsom days, might be mutually embarrassing. But we are glad to see him in the House and hope that he will take frequent part in our debates.
The main accusation against my right hon. Friend and the Government has been of complacency. I agree that it is of great importance that no member of a Government talking about housing should ever allow himself to slip into complacency, but the temptation is great. When an Opposition, with the whole field of politics at their disposal, choose a Supply debate on home ownership and then, in every single respect, are found to be wrong in what they say, while the facts and statistics are found to be in our favour, the result is not a dispassionate debate with critical suggestions about the future, but a great deal of argument about the figures.
We who are being accused of being congenitally against home ownership and hysterically hostile to private building have, as a Government, presided over 200,000 completions every year of private sector houses. In only one year, the year that we came in, did the party opposite reach 200,000 completions. These are the facts upon which we must approach these problems.
I was glad that both my hon. Friend the Member for Norwood (Mr. John Fraser) and the hon. Member for Orpington (Mr. Lubbock) made the point with which I was going to start, that we must recognise that we are working under conditions of great economic difficulty. The facts of the situation are that we have a capital famine, that we must husband our resources and that we have to face a high international interest rate. But, without being complacent, we are entitled to take tremendous pride in the fact that, in spite of those difficulties, we have been able to achieve such a great success over such a wide field in housing.
I want to start with the Option Mortgage Scheme, which, rightly, played a large part in the debate. There has been a good deal of criticism of it and of our booklet. The dilemma is that one wants to give information—which we are always being accused of being slow to give—and, on a highly technical subject, one must balance the need to be clear and simple against the need to be

accurate. There is nothing inaccurate in this booklet, which carefully says that one can talk only in general terms about when an option mortgage is likely to help. At the same time, in very large type, it emphasises that
if you choose an option mortgage you will not be able to change your mind and go back to income tax relief afterwards.
We make it clear. To suggest that this is some sort of fraud is an extremely inept observation by the right hon. and learned Member for Hexham (Mr. Rippon). We will certainly redraft the booklet, now that existing borrowers are no longer part of the scheme, to make it reliable and informative.
I do not agree with some of my hon. Friends, particularly my hon. Friend the Member for Bethnal Green (Mr. Hilton), who were inclined to dismiss the scheme because only 10 per cent. of people have opted for it. If we can keep up that steady rate, which we have since it began, that would not be a bad figure. These, after all, are essentially the people who will benefit, who do not benefit from tax relief. It was the difficulty over the discrimination of Income Tax reliefs for mortgages which we tried to overcome.
About 160,000 existing borrowers have opted. In May, a test sample showed that about 3,700 new borrowers had opted that month. These are people who are finding it of benefit, and the suggestion that they have all been outraged at discovering that they were not getting as much as they had hoped to get is very exaggerated. Our records in the Department show that we have had, from all those people, only about 200 letters complaining that they had not found the scheme as effective as they had hoped.
The great advantages of the scheme are, first, that it gives a lower and regular annual payment of the charges on the mortgage, and, second—this is not always appreciated—that it gives a quicker repayment of capital than under ordinary Income Tax relief. Therefore, when the time comes to sell a house, the value which comes back to the owner-occupier will be greater, because he has paid off more of the capital which he has borrowed; therefore, it will come to him on a scale proportionately greater than it would in a comparable situation under Income Tax relief.

Mr. Rippon: Is that all that the hon. Gentleman intends to say about the undertaking given by the Financial Secretary on 3rd July last, when he said that the most urgent inquiries would be made into the difficulties created by the operation of the Finance Act in this respect? Is he aware that his right hon. Friend said that while he regretted that, within the framework of the tax system, he could not solve the problem, he would see that the matter was put right? Will he make it clear that the Government will not shed responsibility for the position?

Mr. MacColl: My right hon. Friend has not shed responsibility for the position. The urgent inquiries have been made and we are satisfied that the scheme is working well and is performing a good service. Subject to carrying out a revision of the booklet, I do not think that we need do more.

Mr. Rippon: The Financial Secretary promised to help those who had suffered hardship.

Mr. MacColl: Nobody suffered hardship who read the booklet correctly. Warnings were given in the booklet about what one must do if one wished to take the option. The swings and roundabouts must be balanced in relation to possible tax changes, and so on. In any event, as the scheme has been in operation for only three months, it is too early to say that it is working unfairly.
There has been much discussion of my right hon. Friend's announcement to limit the sale of council houses in some big conurbations. Time does not permit me to go in great detail into this matter, but I must point out that my right hon. Friend has the responsibility of approving sales of corporation property. Hon. Gentlemen opposite have said that he should not interfere with the discretion of local councils. My right hon. Friend has a duty to see that corporation property is sold at the right price and in such a way that it assists the provision of houses.
My right hon. Friend has constantly been saying that he does not want to interfere or quarrel with local authorities, but that he has an overriding duty to see that there is an adequate supply of council houses. This

has made it necessary for him to consider this whole matter. Indeed, in his circular issued in March, 1967, he said that within a year he would be looking at the problem. He said that before the local elections. My right hon. Friend is fully entitled to take this decision.
The Mortgage Guarantee Scheme, which enables people to get help, has also been greatly discussed. At first, hon. Gentlemen opposite said that this scheme would not come into operation. They then said that it was a flop, even before it had had time to work. It was interesting to hear the right hon. and learned Member for Hexham, who is a master of mistiming prophesies, say that the scheme was a betrayal. When the scheme was being debated I explained that we would discuss the matter with the lending agencies and that it would be brought into operation as soon as funds were available.
In denouncing us, the hon. Member for Southend, West (Mr. Channon) then accused us of being chicken hearted and pusillanimous and the great height of his peroration was that we were a timid collection of frightened geese. When one considers that when we came to power we did not have adequate housing subsidy arrangements, that we had to reconstruct the scheme for the public sector and get it through Parliament, design the option mortgage arrangements and introduce the guarantee scheme, we have done very well. Already, we have succeeded in protecting home owners through the work of the building societies, the builders and the house registration facilities.
About 80 per cent. of houses are registered in this way and are thereby guaranteed, compared with an extremely small number so guaranteed in 1964. These are real achievements. If we were a lot of frightened geese, I only hope that hon. Gentlemen opposite can get fertilised by the same gander.

Mr. Graham Page: Does not the hon. Gentleman realise that on the 100 per cent. mortgage issue we have been pointing out that such a mortgage can be given only to a man who can take advantage of the Option Mortgage Scheme, that such a man does not have a rising income and that he is just the man who wants a 100 per cent. mortgage? Since the scheme is bound to fail because of this, is not the hon. Gentleman prepared to look at the matter again?

Question put:—

The house divided: Ayes 234, Noes 318.

Division No. 284.]
AYES
[7.8 p.m.


Alison, Michael (Barkston Ash)
Clover, Sir Douglas
Munro-Lucas-Tooth, sir Hugh


Allason, Barnes (Hemel Hempstead)
Goothart, Philip
Murton, Oscar


Astor, John
Goodhew, Victor
Nabarro, Sir Gerald


Atkins, Humphrey (M't'n &amp; M'd'n)
Grant, Anthony
Neave, Airey


Awdry, Daniel
Grant-Ferris, R.
Nicholls, Sir Harmar


Baker, Kenneth (Acton)
Gresham Cooke, R.
Noble, Rt. Hn. Michael


Baker, W. H. K. (Banff)
Grieve, Percy
Onslow, Cranley


Balniel, Lord
Griffiths, Eldon (Bury St. Edmunds)
 Orr, Capt. L. P. S.


Barber, Rt. Hn. Anthony
Gurden, Harold
Orr-Ewing, Sir Ian


Batsford, Brian
Hall, John (Wycombe)
Osborn, John (Hallam)


Beamish, Col. Sir Tufton
Hall-Davis, A. G. F.
Page, Graham (Crosby)


Bell, Ronald
Hamilton, Michael (Salisbury)
Pearson, Sir Frank (Clitheroe)


Bennett, Sir Frederic (Torquay)
Harris, Frederic (Croydon, N.W.)
Peel, John


Bennett, Dr. Reginald (Cos. &amp; Fhm)
Harrison, Brian (Maldon)
Percival, Ian


Berry, Hn. Anthony
Harvey, Sir Arthur Vere
Peyton, John


Biffen, John
Hawkins, Paul
Pike, Miss Mervyn


Biggs-Davison, John
Hay, John
Pink, R. Bonner


Birch, Rt. Hn. Nigel
Heald, Rt. Hn. Sir Lionel
Pounder, Rafton


Black, Sir Cyril
Heseltine, Michael
Powell, Rt. Hn. J. Enoch


Blaker, Peter
Higgins, Terence L.
Price, David (Eastleigh)


Boardman, Tom (Leicester, S.W.)
Hiley, Joseph
Pym, Francis


Bossom, Sir Clive
Hill, J. E. B.
Quennell, Miss J. M.


Boyd-Carpenter, Rt. Hn. John
Hirst, Geoffrey
Ramsden, Rt. Hn. James


Boyle, Rt. Hn. Sir Edward
Hogg, Rt. Hn. Quintin
Rawlinson, Rt. Hn. Sir Peter


Braine, Bernard
Holland, Philip
Rees-Davies, W. R.


Brewis, John
Hordern, Peter
Renton, Rt. Hn. Sir David


Brinton, Sir Tatton
Hornby, Richard
Rhys Williams, Sir Brandon


Bromley-Davenport, Lt.-Col.SirWalter
Howell, David (Guildford)
Ridley, Hn. Nicholas


Brown, Sir Edward (Bath)
Hunt, John
Ridsdale, Julian


Bruce-Gardyne, J.
Iremonger, T. L.
Rippon, Rt. Hn. Geoffrey


Bryan, Paul
Irvine, Bryant Godman (Rye)
Robson Brown, Sir William


Buchanan.Smith,Alick (Angus, N &amp; M)
Jenkin, Patrick (Woodford)
Rodgers, Sir John (Sevenoaks)


Buck, Antony (Colchester)
Jennings, J. C. (Burton)
Rossi, Hugh (Hornsey)


Bullus, Sir Eric
Johnson Smith, G. (E. Grinstead)
Royle, Anthony


Burden, F A
Jones, Arthur (Northants, S.)
Russell, Sir Ronald


Campbell, B. (Oldham, W.)
Jopling, Michael
St. John-Stevas, Norman


Campbell Gordon (Moray &amp; Nairn)
Joseph, Rt. Hn. Sir Keith
Sandys, Rt. Hn. D.


Carr, Rt. Hn. Robert




Cary, Sir Robert
Kaberry, Sir Donald
Scott, Nicholas


Channon, H. P. G.
Kerby, Capt. Henry
Scott-Hopkins, James


Chichester-Clark, R.
Kershaw, Anthony
Sharples, Richard


Clark, Henry
Kimball, Marcus
Shaw, Michael (Sc'b-gh &amp; Whitby)


Clegg, Walter
King, Evelyn (Dorset, S.)
Silvester, Frederick


Cooke, Robert
Kirk, Peter
Sinclair, Sir George



Kitson, Timothy



Cooper-Key, Sir Neill
Knight, Mrs. Jill
Smith, Dudley (W'wich &amp; L'mington)


Corfield, F. V.
Knight, Mrs. Jill
Smith, John (London &amp; W'minster)


Costain, A. P.
Lambton, Viscount
Speed, Keith


Craddock, sir Beresford (Spelthorne)
Lancaster, Col. C. G.
Stainton, Keith


Crouch, David
Lane, David
Stodart, Anthony


Crowder, F. P.
Legge-Bourke, Sir Harry
Stoddart-Scott, Col. Sir M. (Ripon)


Cunningham, Sir Knox
Lewis, Kenneth (Rutland)
Summers, Sir Spencer


Currie, G. B. H.
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Tapsell, Peter


Dalkeith Earl of
Lloyd, Ian (P'tsm'th, Langstone)
Taylor, Sir Charles (Eastbourne)


Dance, James
Longden, Gilbert
Taylor, Edward M. (G'gow, Cathcart)


d'Avigdor-Goldsmid, Sir Henry
Loveys, W. H.
Taylor, Frank (Moss Side)


Dean, Paul (Somerset, N.)
McAdden, Sir Stephen
Teeling, Sir William


Digby, Simon Wingfield
MacArthur, Ian
Temple, John M.


Dodds-Parker, Douglas
Maclean, Sir Frtzroy
Thatcher, Mrs. Margaret


Doughty, Charles
Macleod, Rt. Hn. lain
Tilney, John


Douglas-Home, Rt. Hn. Sir Alec
McMaster, Stanley
Turton, Rt. Hn. R. H.


Drayson, G. B.
Macmillan, Maurice (Farnham)
van Straubenzee, W. R.


du Cann, Rt. Hn. Edward
Maddan, Martin
Vaughan-Morgan, Rt. Hn. Sir John


Eden, Sir John
Maginnis, John E.
Vickers, Dame Joan


Elliot, Capt. Walter (Carshalton)
Marten, Neil
Waddington, David


Elliott, R.W. (N'c'tle-upon-Tyne,N.)
Maude, Angus
Walker, Peter (Worcester)


Emery, Peter
Maudling, Rt. Hn. Reginald
Walker-Smith, Rt. Hn. Sir Derek


Errington, Sir Eric
Mawby, Ray
Wall, Patrick


Farr, John
Maxwell-Hyslop, R. J.
Walters, Dennis


Fisher, Nigel
Maydon, Lt.-Cmdr. S. L. C.
Ward, Dame Irene


Fletcher-Cooke, Charles
Mills, Peter (Torrington)
Weatherill, Bernard


Fortescue, Tim
Mills, Stratton (Belfast, N.)
Webster, David


Foster, Sir John
Miscampbell, Norman
Wells, John (Maidstone)


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Mitchell, David (Basingstoke)
Whitelaw, Rt. Hn. William


Galbraith, Hn. T. G.
Monro, Hector
Williams, Donald (Dudley)


Gilee, Rear-Adm. Morgan
Montgomery, Fergus
Wills, Sir Gerald (Bridgwater)


Gilmour, Ian (Norfolk, c.)
Morrison, Charles (Devizes)
Wilson, Geoffrey (Truro)


Gilmour, Sir John (Fife, E.)
Mott-Radclyffe, Sir Charles
Wolrige-Gordon, Patrick




Wood, Rt. Hn. Richard
Wylie, N. R.
TELLERS FOR THE AYES:


Worsley Marcus
Younger, Hn. George
Mr. Jasper More ond


W right, Esmond

Mr. Reginald Eyre.




NOES


Abse, Leo
Edwards, Robert (Bilston)
Jones, J. Idwal (Wrexham)


Albu, Austen
Edwards, William (Merioneth)
Jones, T. Alec (Rhondda, West)


Allaun, Frank (Salford, E.)
Ellis, John
Judd, Frank


Alldritt, Walter
English, Michael
Kelley, Richard


Allen, Scholefield
Ennals, David
Kenyon, Clifford


Anderson, Donald
Ensor, David
Kerr, Mr. Anne (R'ter &amp; Chatham)


Archer, Peter
Evans, A. T. (Caerphilly)
Kerr, Dr. David (W'worth, Central)


Atkins, Ronald (Preston, N.)
Evans, Albert (Islington, S.W.)
Kerr, Russell (Feltham)


Atkinson, Norman (Tottenham)
Evans, loan L. (Birm'h'm, Yardley)
Lawson, George


Bacon, Rt. Hn. Alice
Faulds, Andrew
Leadbitter, Ted


Bagier, Gordon A. T.
Fernyhough, E.
Ledger, Ron


Barnes, Michael
Fitch, Alan (Wigan)
Lee, Rt. Hn. Frederick (Newton)


Barnett, Joel
Fletcher, Raymond (Ilkeston)
Lee, Rt. Hn. Jennie (Cannock)


Baxter, William
Fletcher, Ted (Darlington)
Lee, John (Reading)


Beaney, Alan
Foley, Maurice
Lestor, Miss Joan


Bence, Cyril
Foot, Rt. Hn. Sir Dingle (Ipswich)
Lever, Harold (Cheetham)


Benn, Rt. Hn. Anthony Wedgwood
Foot, Michael (Ebbw Vale)
Lever, L. M. (Ardwick)


Bennett, James (G'gow, Bridgeton)
Ford, Ben
Lewis, Arthur (W. Ham, N.)


Bessell, Peter
Forrester, John
Lewis, Ron (Carlisle)


Bidwell, Sydney
Fowler, Gerry
Lipton, Marcus


Binns, John
Fraser, John (Norwood)
Lomas, Kenneth


Bishop, E. S.
Freeson, Reginald
Loughlin, Charles


Blackburn, F.
Galpern, Sir Myer
Luard, Evan


Blenkinsop, Arthur
Gardner, Tony
Lubbock, Eric


Boardman, H. (Leigh)
Garrett, W. E.
Lyon, Alexander W. (York)


Booth, Albert
Ginsburg, David
Lyons, Edward (Bradford, E.)


Boston, Terence
Gordon Walker, Rt. Hn. P. C.
Mabon, Dr. J. Dickson


Bottomley, Rt. Hn. Arthur
Gourlay, Harry
McBride, Neil


Boyden, James
Gray, Dr. Hugh (Yarmouth)
McCann, John


Braddock, Mrs. E. M.
Greenwood, Rt. Hn. Anthony
MacColl, James


Bradley, Tom
Gregory, Arnold
MacDermot, Niall


Bray, Dr. Jeremy
Grey, Charles (Durham)
Macdonald, A. H.


Brooks, Edwin
Griffiths, David (Rother Valley)
McGuire, Michael


Brown, Rt. Hn. George (Belper)
Griffiths, Eddie (Brightside)
McKay, Mrs. Margaret


Brown, Hugh D. (G'gow, Provan)
Griffiths, Rt. Hn. James (Llanelly)
Mackenzie, Alasdair(Ross&amp;Crom'ty)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Griffiths, Will (Exchange)
Mackenzie, Gregor (Rutherglen)


Brown, R. W. (Shoreditch &amp; F'bury)
Grimond, Rt. Hn. J.
Mackie, John


Buchan, Norman
Hamilton, James (Bothwell)
Mackintosh, John P.


Butler, Herbert (Hackney, C.)
Hamling, William
Maclennan Robert


Butler, Mrs. Joyce (Wood Green)
Hannan William
MacMillan, (Glasgow, C.)


Carmicheal, Neil
Harper, Joseph
McNamara, J. Kevin


Carter-Jones, Lewis
Harrison, Walter (Wakefield)
Mahon, Peter (Preston, S.)


Castle, Hn. Barbara
Hart, Rt. Hn. Judith
Mallalieu, J. P. W. (Huddersfield)


Coe, Denis
Haseldine, Norman
Marks, Kenneth


Coleman, Donald
Hattersley, Roy
Marquand, David


Conian, Bernard
Hazell, Bert
Marsh, Rt. Hn. Richard


Corbet, Mrs. Freda
Healey, Rt. Hn. Edward
Marsh, Rt Hn. Richard


Craddock, George (Bradford, S.)
Heffer, Eric S.
Mason, Rt. Hn. Roy




Maxwell, Robert


Crawshaw, Richard
Henig, Stanley
Mayhew, Christopher


Cronin, John
Herbison, Rt. Hn. Margaret



Crosland, Rt. Hn. Anthony
Hilton, W. S.
Mellish, Rt. Hn. Robert


Crossman, Rt. Hn. Richard
Hooley, Frank
Mendelson, J. J.


Cullen, Mrs. Alice
Horner, John
Mikardo, Ian


Dalyell, Tam
Houghton, Rt. Hn. Douglas
Millan, Bruce


Darling, Rt. Hn. George
Howarth, Harry (Wellingborough)
Milne, Edward (Blyth)


Davidson, Arthur (Accrington)
Howarth, Robert (Bolton, E.)
Mitchell, R. C. (S'tn'pton, Test)


Davies, Ednyfed Hudson (Conway)
Howell, Denis (Small Heath)
Molloy, William


Davies, G. Elfed (Rhondda, E.)
Howie, W.
Moonman, Eric


Davies, Dr. Ernest (Stretford)
Hoy, James
Morgan, Elystan (Cardiganshire)


Davies, Harold (Leek)
HUCKFIELD, Leslie
Morris, Charles (Openshaw)


Davies, Ifor (Gower)
Hughes Rt. Hn. Cledwyn (Anglesey)
Morris, John (Aberavon)


Davies, S. O. (Methyr)
Hughes, Emrys (Aryshire, S.)
Moyle, Roland


de Freitas, Rt. Hn. Sir Geoffrey
Hughes, Hector (Aberdeen, N.)
Mulley, Rt. Hn. Frederick


Delargy, Hugh
Hughes, Roy (Newport)
Murray, Albert


Dell, Edmund
Hunter, Adam
Newens, Stan


Dempsey, James
Hynd, John
Norwood, Christopher


Dewar, Donald
Irvine, Sir Arthur (Edge Hill
Ogden, Eric


Diamond, Rt. Hn. John
Jackson, Colin (B'h'se &amp; Spenb'gh)
Oram, Albert E.


Dickens, James
Janner, Sir Barnett
Orbach, Maurice


Dobson, Ray
Jay, Rt. Hn. Douglas
Orme, Stanley


Doig, Peter
Jeger, George (Goole)
Oswald, Thomas


Driberg, Tom
Jenkins, Hugh (Putney)
Owen, Dr. David (Plymouth, S'tn)


Dunn, James A.
Jenkins, Rt. Hn. Roy (Stechford)



Dunnett, Jack




Dunwoody, Mrs. Gwyneth (Exeter)
Johnson, Carol (Lewisham, S.)
Owen, Will (Morpeth)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Johnson, James (K'ston-on-Hull W.)
Page, Derek (King's Lynn)


Eadie, Alex
Jones, Dan (Burnley)
Paget, R.T


Edelman, Maurice
Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)
Palmer, Arthur







Pannell, Rt. Hn. Charles
Shaw, Arnold (Ilford, S.)
Tuck, Raphael


Pardoe, John
Sheldon Robert
Urwin, T. W


Park, Trevor
Shinwell, Rt. Hn. E.
Varley, Eric G.


Parker, John (Dagenham)
Shore, Rt. Hn. Peter (Stepney)
Wainwright, Edwin (Dearne Valley)


Parkyn, Brian (Bedford)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Wainwright, Richard (Colne Valley)


Pavitt, Laurence
Short, Mrs. Renée (W'hampton, N. E.)
Walker, Harold (Doncaster)


Pearson, Arthur (Pontypridd)
Silkin, Rt. Hn. John (Deptford)
Watkins David (Consett)


Peart, Rt, Hn. Fred
Silkin, Hn. S. C. (Dulwich)
Weitzman, David


Pentland, Norman
Silverman, Julius
Wellbeloved, James


Perry, Ernest G. (Battersea, S.)
Silverman, Julius
Wells, William (Walsall, N.)


Perry, George H. (Nottingham, S.)
Skeffington, Arthur
Whitaker, Ben


Prentice, Rt. Hn. R. E.
Slater, Joseph
White, Mrs. Eirene


Price, Christopher (Perry Barr)
Small, William
Wilkins, W. A.


Price, Thomas (Westhoughton)
Snow, Julian
Willey, Rt. Hn. Frederick


Probert, Arthur
Spriggs, Leslie



Pursey, Cmdr. Harry
Steele, David (Roxburgh)
William, Alan (Swansea, W.)


Randall, Harry
Steele, Thomas (Dunbartonshire, W.)
Williams, Clifford (Abertilley)


Rankin, John
Stewart, Rt. Hn. Michael
Williams, Mrs. Shirley (Hitchin)


Rees, Merlyn
Stonehouse, Rt. Hn. John
Williams, W. T. (Warrington)


Richard, Ivor
Strauss, Rt. Hn. G. R.
Willis, Rt. Hn. George


Roberts, Rt. Hn. Goronwy (Caernarvon)
Summerskill, Hn. Dr. Shirley
Wilson, William (Coventry, S.)


Roberts, Gwilym (Bedfordshire, S.)
Swain, Thomas
Winstanley, Dr. M. P.


Robertson, John (Paisley)
Swingler, Stephen
Woodburn, Rt. Hn. A.


Robinson, Rt. Hn. Kenneth (St.P'c'as)
Symonds, J. B.
Woof, Robert


Robinson, W. O. J. (Walth'stow, E.)
Taverne, Dick
Wyatt, Woodrow


Rodgers, William (Stockton)
Thomas, Rt. Hn. George
Yates, Victor


Roebuck, Roy
Thomson, Rt. Hn. George



Rogers, George (Kensington, N.)
Thornton, Ernest
TELLERS FOR THE NOES:


Boss, Rt. Hn. William
Thorpe, Rt. Hn. Jeremy
Mr. Ernest Armstrong and


Rowlands, E. (Cardiff, N.)
Tinn, dames
Mr. J. D. Concannon.


Ryan, John
Tomney, Frank

Orders of the Day — EMPLOYMENT (REDUNDANCY FUND)

7.20 p.m.

The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): I beg to move,
That the Redundancy Fund (Increase of Contributions) Order 1968, a draft of which was laid before this House on 16th July, be approved.

Mr. Speaker: It seems to me that if the House has no objection we can, with this Order, take the Redundancy Fund (Advances out of the National Load Fund) (No. 2) Order, 1968.

Mr. Hattersley: Yes, Mr. Speaker. Because of the agreement of the House, two Orders are before us simultaneously.
If the House approves the Redundancy Fund (Advance out of National Loan Fund) (No. 2) Order, my right hon. Friend will be empowered to obtain temporary loans for the Redundancy Fund up to a maximum of £20 million. She will be able to exercise this power from 16th August.
Section 35 of the Redundancy Payments Act made provision for borrowing up to a limit of £8 million. The total borrowing limit may be increased up to a maximum of £20 million if both Houses approve Orders authorising the additional amounts. I am, therefore, today asking for approval for the maximum sum specified in the Act. Any additional borrowing would be possible only after amendment to the original Act.
The Redundancy Fund (Increases of Contributions) Order increases the weekly contribution paid by employers to the Redundancy Fund from l0d. to 1s. 3d. for men and from 5d. to 7d. for women. The new payment will apply from 2nd September, 1968. This increase, if approved by the House, will be made under powers given to the First Secretary by Section 27(3) of the Redundancy Payments Act.
The House will know that, during its early life, the Redundancy Fund remained in approximate balance, with receipts and expenditure more or less equal By February, 1967 it was clear that the receipts were no longer adequate, and contributions were increased from 5d. to l0d. for men and from 2d. to 5d. for women.
The then Minister of Labour told the House that his original intention was to increase the contributions to 1s. for men and 6d. for women, but after consultation with the C.B.I, and the T.U.C. he accepted a smaller increase. Of course, the decision to recommend the lower figure to the House is the responsibility of the Government and the Government's alone. However, the decision was taken, after industry—which finances the Fund and to whom the fund belongs in a very real sense—had been properly consulted. In my view, we were absolutely right to agree to operate on what then appeared to be a minimum necessary contribution.
Industry continues to hold the view that we should operate as near to the margin as is prudent. Acceptance of that principle must mean that although we can promise that the contribution is not put up to an unnecessarily high level, there may be times when the tolerances we have allowed ourselves are just not sufficient to cover fluctuations in demands on the fund.
In July, 1967, because expenditure was greater than income, we had to increase the fund's borrowing limits from £8 to £12 million. I told the House then that the increased borrowing limit was a temporary expedient and that my Ministry was considering, with industry, the level of future contributions. In his Budget statement this year, the Chancellor of the Exchequer announced that from 2nd September contributions would increase to 1s. for men and 6d. for women, thus achieving the level we had recommended the year before. In April this year I asked the House for permission to increase the borrowing limit to £15 million to meet the outgoings from the fund until these new contribution levels had increased its income.
Before hon. Gentlemen quote to the House what I then said, let me quote it myself. I told the House that I hoped that the fund would be in surplus within two years, and that these increases should not be taken to imply any pessimism on the Government's part about the future trend in unemployment. I also told the House that the inability of the fund to meet all the demands upon it were neither the result of inadequate forecasting nor of unemployment persisting at a higher level than we had anticipated. I repeat this evening that the additional demands


on the fund then and now are neither the result of inadequate forecasting nor of unemployment persisting at a higher level than we had anticipated.
Unfortunately for forecasting, the level of unemployment alone does not determine the outgoings from the fund. Payments vary according to the men and women made redundant—their age, their length of service in their last job and the pay they received. All these factors influence the size of each individual redundancy payment and complicate the task of forecasting outgoings from the fund with any accuracy.
For example, 10 men under 40 with six years' service and average earnings of £20 per week receive from the fund less than one-third of the payments made for 10 older men with 15 years' service and average earnings of £24 per week. To forecast with any accuracy the calls on the fund we would need to predict not only the number of new redundancies, but the ages, service and wages of each man who became redundant. This is clearly an impossible task.
This position has been well exemplified during the first six months of this year. The number of individual payments has slightly decreased. In the three months ending in March there were 63,500; in the three months ending June there were 62,700. Yet outgoings from the fund have continued to rise because the average amount of each payment has increased too sharply. The average payment for the whole financial year ending March 1968 was £155; in the last quarter of that year it was £164; in the first quarter of this financial year it has risen to £173. As a result of this, weekly expenditure, which I reported to the House in April as averaging £800,000 during the previous nine months, has risen to £900,000, although the actual number of redundancy payments has fallen during the same period.
The increased contributions of 1s. and 6d. which were announced in April would have produced an income of £835,000 per week—a figure clearly inadequate: to meet outgoings at the present level. The figure which I now recommend to the House will produce a weekly income of over £1 million. If expenditure remains steady at the £900,000 figure, the deficit will be wiped

out in 1971. I emphasise that as no more than a simple arithmetical fact. If expenditure remains steady the deficit will disappear in three years. But whether or not it remains steady depends on the average level of wages over the next three years and the employment record of men and women made redundant.
Because of this sudden and unpredictable deterioration in the finances of the fund, this remedial action which I now commend to the House has had to be taken after less than adequate consultation with either side of the industry. Both the C.B.I, and T.U.C. have been informed, but we would have welcomed the opportunity to discuss the increase with them in greater detail. We have, however, received the views of the C.B.I. It accepts the increase as inevitable, but it reiterates its view that it is important for us to keep the redundancy contribution as near to the operation cost of the fund as possible. It is, in short, opposed to a large surplus being built up in the fund at the expense of industry. We agree with that view, and it is because of our agreement that such a surplus would be undesirable that we have constantly held the contribution level down to a basic minimum. I am sure that we were right to do this, but the House will understand that this has involved the possibility of the fund falling into deficit and contribution increases having to be made to retrieve that position.
Another by-product of that decision is that Ministers, myself among them, have been required to come to the House with boring frequency to confess that the figures have changed during the last few months. I take the view, and if the House agrees to nothing else I am sure it will agree with this, that this is an attempt to operate as near as possible irrespective of the marginal embarrassment caused to my right hon. Friend and to me.
Clearly, this increase is an additional burden on industry and at a time when the Government are urging industry to become increasingly competitive I cannot commend this increase to the House with anything but regret. But I think that it would be wrong were we to overestimate how great is the additional burden involved. The whole Redundancy Fund


Contribution represents little more than one quarter of 1 per cent. of labour costs. The increase for which I ask today is less than one-tenth of 1 per cent.
In addition, and perhaps more important, I believe that the contribution that industry makes to the fund is a real contribution towards industrial efficiency. An examination of the payment pattern from the fund shows very clearly that there is no very large permanent pool of unemployed. Were the men who are unemployed this month the same as those who were unemployed two or three months ago we would be making far fewer redundancy payments than we are now. The continuing size of the redundancy payments, together with the fall in the numbers of unemployed, makes it clear that there is both a movement on to and away from the register of unemployed. This movement—this policy of redeployment—is carried on with infinitely less friction than would be the case were there no redundancy payment to soften the blow of temporary unemployment.
This argument, in my view, applies as much to a man who loses one job and immediately finds another as it does to a man who has a period of unemployment between his old job and his new job. An unconditional redundancy payment encourages the individual to accept the difficulties and adjustments involved in changing jobs with less resentment than he would do otherwise. It is the compensation for the loss of a job, for the loss of security and for all the risks involved in leaving one job and moving to another and it has come about as a result of the scheme. The fund is well worth paying for in practical hard commercial terms.
In a recent small sample survey my Ministry found no single cases where it could be said that payment had been made where no redundancy existed. Of course, in any scheme as complicated and as involved as this, covering as it does so many workers and so many companies, there may be people who have abused the scheme, but they are few in number—infinitely fewer than the critics sometimes suggest. They are certainly far too few to make a significant difference to the level of payment from the

fund. The overwhelming majority of payments are made to men who have genuinely lost their jobs and who genuinely seek other employment. Because of this the scheme works, humanely and compassionately, but it also helps to alter employment patterns without friction and without conflict.
That, in itself, justifies the scheme and the extent of the scheme. It is in that spirit, in the spirit of the need to continue the scheme solvently and successfully that I commend these Orders to the House.

7.34 p.m.

Mr. Nicholas Scott: When the right hon. Lady the Secretary of State for Employment and Productivity invited the hon. Member for Poplar (Mr. Mikardo) to attend a party to celebrate the passing of the Prices and Incomes Act, he replied that his suit of sackcloth and ashes was at the cleaners. I wondered whether the Joint Parliamentary Secretary might have managed to borrow it for this evening's proceedings.
He has come so frequently to the House having so firmly forecast that the powers he was taking either for the level of contribution or for borrowing were going to be adequate to keep the fund solvent and he has now had to come back to us for yet another massive increase in both. He has had to do so while having to confess that this decision again has been taken without any proper consultation with those to whom he so frequently tells us the fund is supposed to belong.
I make quite clear that we on this side of the House accept the need for some scheme for economic and social reasons to cope with redundancy. We shall not oppose the Order because we accept that the fund must remain solvent, but I am sure it would be wrong for us to pass these Orders without questioning both the past history and the future prospects of the Fund to which these Orders relate. After all, we have been here several times before, as the hon. Gentleman confessed.
When the contributions were included in the Act, they were at the levels of 5d. and 2d. In November, 1966 they were increased to 10d. and 5d. for men and women respectively. In the Budget we were promised, an increase to 1s. and 6d.


Now, before those increases have been implemented, we have a further increase to 1s. 3d. for men and 7d. for women. The story about the borrowing powers is very similar. In the Act, although the upper limit was £20 million, the Government were empowered to borrow up to only £8 million. In July, 1967 that rose to £12 million. In April, 1968 it rose to £15 million and now it has been raised to the limit empowered by the Act of £20 million.
It is a sad story of bad forecasting and escalating costs trying desperately to maintain the solvency of the Fund. Of course, it is small beer compared with the additional contributions in terms of taxation and additional debts which the Government have heaped on to the country, but in its field it is important.
The first point I come to is the accuracy of the forecasts the Government make about this fund and their hopes for keeping it solvent. When we go back to the Second Reading of the original Bill, we remember that the then Minister of Labour, of blessed memory, said of the 5d. and 2d. levels that the total cost would depend on a variety of factors. He said:
 In the light of this, we have proposed a level of surcharge which should, we think, ensure that the Redundancy Fund is self-financing over a substantial period."— [OFFICIAL REPORT, 26th April, 1965: Vol. 711, c. 44.]
This was three years ago and we were talking about a level one-third of that in the Orders we are debating.
On 24th July, 1967 the Joint Parliamentary Secretary came back to the House for increased borrowing powers. He said:
I emphasise again that any problems of tiding over difficulties are in a sense hypothetical. Certainly they are hypothetical in terms of a £12 million ceiling. My right hon. Friend believes that the £12 million ceiling will never be reached. It is certainly possible that the existing ceiling of £8 million may prove adequate, but I am sure that the House will agree that prudent management of the Fund requires us to make sure that sums are available to bolster and buttress the Fund to keep it out of deficit."—[OFFICIAL REPORT, 24th July, 1967; Vol. 751, c. 275.]
To adapt a famous phrase, some hypothesis, some deficit!
On 4th April this year we had Orders further to increase the borrowing powers. One would have thought that by this time the fact that so many fore-

casts had proved inadequate the hon. Gentleman would have learned some of the prudence he was proclaiming on the previous occasion yet even then he was making firm forecasts which have since proved completely inadequate. He said:
how can the House accept my assurance that no further sums will be needed? The answer is this: even during the period of maximum outgoings the average over the past six or eight months has been £799,000 a week. By 2nd September, when the increased contributions are due, the weekly income will be £830,000 per week. Even if outgoings persist at their present level, which I am sure the House will agree is an unlikely eventuality, there will be a weekly surplus on the fund.
What I am suggesting to the House it that by offering the knowledge that the contribution is to increase, I am offering the certainty that the borrowing powers at present asked for will pay the bill until that time.
My hon. Friend the Member for Harrow, West (Mr. John Page), who wound up for the Opposition, asked:
Was the hon. Gentleman sincere in what he said tonight and does not he think that the Fund will be knocking on the door of £15 million within another eight months? I do not see why there should be a dramatic change in pattern ".
The Parliamentary Secretary returned to the point and reasserted:
The £15 million ceiling will preserve that solvency. The new rate of contribution in September will make solvency permanent. I hope we all agree that our intention to maintain solvency with minimum borrowing powers is the right step to take."—[OFFICIAL REPORT, 4th April, 1968; Vol. 762, c. 707–23.]
All these forecasts successively have been proved to be nonsensical. Have the Government managed to study the redundancy patterns so that the forecasts which they are making about the future claims upon the fund are better than those which have gone before? Today we are debating yet another increase in contributions and in borrowing powers. It is right that we should ask why.
The hon. Gentleman was clear and strong on the fact that the anomalies and abuses do not add up to any significant impact on the Fund. Will he quantify this later, because this was a very flat assertion? We all read about all sorts of abuses that occur.The Guardian for 5th March of this year said:
Three men in Peterborough were awarded more than £400 between them, although they had never left their job. The firm they worked for was a wholly-owned subsidiary


which was changed into an active company. A clerk who was declared redundant by a company and collected £160 from the fund was taken back a month later to do a similar job. A union district secretary has cited cases of collusion between employer and employees to make the worker eligible for payment.
Then there are the stories about firms where, when an employee is getting near to retiring age and is not available for any substantial pension, he is declared redundant and takes a substantial handout from the fund. It may be right that he should get some sort of handout, but it is quite another question whether it should be from the fund and whether the fund should be used in this way.
Perhaps the most blatant example of abuse of the fund was the change over in the television companies. I quote fromThe Times of 23rd March:
Technicians have all been guaranteed jobs with the new London weekend Thames Television, the Welsh Harlech and the Yorkshire Television groups, but as well as continuity of employment and full pension rights they have also received payments believed to total up to £250,000.
I think that the hon. Gentleman has a duty to justify his flat assertion that the anomalies and abuses make no significant impact upon the state of the fund. It would certainly appear that, if these cases are at all widespread, the fund is being abused; and its administration and, without getting out of order, perhaps even the Act itself need tightening up.
Have the Government made any more accurate estimate than, again, the rather flat assertion that the hon. Gentleman made about the link between the level of unemployment and demands on the fund? The hon. Gentleman rightly said that there is no absolute link, that the demands on the fund depend upon the number of men made redundant, upon their length of service, upon the pay that they are receiving, and upon their age.
The very fact that the total level of unemployment is rising means almost certainly that the numbers who are making claims upon the fund will rise; so there must be some link somewhere. I should be surprised if the high and, indeed, rising level of unemployment was not having a significant impact on the present state of the fund. One thing that they both have in common is that the

accuracy of the forecasts by right hon. and hon. Members opposite have been miserably inadequate. I do not want to stray out of order, but forecasts have been made about the state of the fund and about the level of unemployment. Both have been proved wrong. I believe that there is a link between the two.
After all, we have very firm forecasts about the state of unemployment in the late summer and autumn of this year. To go to the fountain head, as it were, the Prime Minister said this on 22nd November last year:
Certainly I do, and can tell him, on the best estimates available to us before devaluation, that unemployment next autumn looked like being well within that 1½ to 2 per cent. bracket, as a result of what was already going forward … it is right to tell the House that the problem which we shall be facing in a year's time is far more likely to be not deflation and unemployment, but expansion to a scale which might lead to labour shortage in many areas."—[OFFICIAL REPORT. 22nd November, 1967; Vol. 754, c. 1334.]
In fact, as we know, the performance has not lived up to that promise.
The Parliamentary Secretary said that there is no permanent pool of unemployed, but within the figures of unemployment the precentage of those who are long-term unemployed has been rising steadily. In January of this year 50 per cent. of those who were unemployed had been unemployed for eight weeks or less. In June the figure was down to 32 per cent. Long-term unemployment seems to be on the increase. Unemployment in total rose again this month. The figure for this month, seasonally adjusted, is 581,000 or 2·5 per cent. This is the highest figure since seasonally adjusted figures have been kept. It is even in excess of the much vaunted and much discussed February, 1963 figure. I repeat that the seasonally adjusted figures today are the highest for any month since figures have been published. I am sure that this has an impact upon the level of demand on the fund.
My penultimate question is this. The hon. Gentleman is asking for contributions to go up to three times the level envisaged in the original Act and for substantial additional borrowing powers, right up to the limit envisaged in the original Act. We have a continuing high level of unemployment and, indeed, a rising level of unemployment. On 2nd


September, the Selective Employment Tax will be increased by 50 per cent. We know that this tax was supposed to be one of the weapons to bring about, in the Prime Minister's immortal phrase, the
more purposive use of labour".
The Parliamentary Secretary once said that he did not know what that phrase meant. I do not know whether the Prime Minister has yet told him what it means.
We can argue about the effects of the Selective Employment Tax. The Government say that the tax means redeployment and it means people losing their jobs; it means people moving to other jobs. If this is so, it surely means additional claims upon the fund. Yesterday's summary inThe Times of the London and Cambridge Economic Bulletin showed that productivity is rising very fast. If productivity is to rise at 6 per cent. or 7 per cent. a year and the economy is to expand at only 3 per cent. or 4 per cent. a year approximately—one would doubt that—unemployment itself must rise. This will mean still more claims upon the Fund.
We are absolutely at the limit of the borrowing powers. One wonders whether the Government ought not to be thinking about foreshadowing a new Act in the Gracious Speech for next Session, because it seems that the powers under the existing Act have been exhausted.
Both the C.B.I. and the hon. Gentleman's Department are looking at the working of the scheme, but, in the light of the continued inadequancy of Government forecasting, I wonder whether some more detailed and more public examination, perhaps by the Public Accounts Committee or by the Estimates Committee, is now necessary. I have no doubt that we need the redundancy payments scheme. As I have said, for both economic and social reasons, something of the sort is necessary, but, in view of the record of Government forecasting and their management of the scheme, I hope that we shall, before approving these Orders, have satisfactory answers to the questions which I have raised.

7.50 p.m.

Mr. A. G. F. Hall-Davis: I echo the suggestion of my hon. Friend the Member for Padding-ton, South (Mr. Scott) that this might well be a suitable subject for study by

one of the Select Committees. Nothing but benefit could result.
The objective of the Redundancy Payments Act is well worth expenditure, and substantial expenditure at that. As I have not previously addressed the House on this subject, I make clear my general attitude to the Act at the outset. None the less, when Orders involving expenditure on the present scale come before us, it is right to ask whether that level of expenditure can be justified by certain knowledge that it is wisely applied and used to the maximum effect.
It is worth restating in every debate we have on this and allied quesions that the purpose of the expenditure is well worth while. First, it reduces the sense of personal insecurity, which is of great importance in the contribution which we can make to the total sum of human happiness. Second, it helps to make industrial change more tolerable for the individual. In those two ways, the expenditure makes it less likely that firms will shrink from or be diverted from action which is economically desirable. Thus, the scheme helps to bring about a willingness to achieve the reorientation of production and organisation in industry which we all agree is so much needed.
First, on the general background, it is well to remember that to talk about change is one thing but to be on the receiving end of industrial change is quite another. The right hon. Lady the First Secretary of State, when discussing the claims of the Liverpool busmen, I think it was, used a memorable phrase in speaking of the stress and strain of the work which entered into consideration. I do not believe that we fully appreciate the stress and strain which industrial change and restructuring puts on the individual. When we are considering whether expenditure under the scheme is justified, it is right always to bear in mind the human considerations as well as the purely statistical or economic factors.
The redundancy payments scheme, though an effective measure, is an extremely crude one. We deceive ourselves if we do not recognise that without reservation. A crude or roughly shaped weapon involving expenditure may be acceptable when the expenditure is not unduly large, but, as the expenditure steadily rises, the question is whether the


instrument itself could be refined and directed to better purpose. Its very crudeness may make it unacceptably expensive.
The Under-Secretary of State spoke of the difficulty of forecasting what the expenditure was likely to be. I do not know whether he has them in his Department, but there are such people as actuaries, who spend a substantial part of their time assessing what contributions are necessary for pension funds. Although to give an exact forecast of the contributions required an actuary needs exact details of the age and service structure in the undertaking to which he is applying his mind, he is prepared to give a theoretical forecast based on a cross-section of industry, and can do so quite accurately.
The only element in the redundancy payments scheme which does not arise in forecasting the cost of a pensions fund is that, as well as length of service and salary level on retirement—which both enter into the final pension fund calculation—there is the factor of age as well. That is the only factor present in the redundancy fund calculation which is not present in the other.
I hope, therefore, that the Department will set about this question and cease making a margin of error of 350 per cent. We are now asked to approve contributions at 350 per cent. of the original level. If an actuary made a forecast of a pension fund contribution, saying that 15 per cent. would cover the outgoings of the fund, and then, after less than three years, he had to tell his client that he was sorry but 52½ per cent. was required, he would have to do more than make general remarks of the sort which the hon. Gentleman has just uttered about uncertainties and factors which are hard to forecast. It is not good enough. The hon. Gentleman would do better to "come clean" and admit that his Department was not up to the job of forecasting and assure the House that he will do better in future.
Are we getting value for the money? There is little or no attempt to adjust the provision to the individual's prospects of re-employment at a similar wage or salary. The three elements in the formula to which I have just referred, length of service, age and pay, come into considera-

tion here. Age has a bearing on the prospect of re-employment, and so has length of service, though, in my view, only insofar as it is a reflection of age. But employment prospects in the individual's locality do not enter into the calculation at all. The cost is the same right across the board. Nor do the skills or qualifications for alternative employment which the individual has.
We pay out of the fund—and we are asked to approve these Orders in the knowledge that we are so doing—the same amount to a man possessing a skill for which there is a known unsatisfied demand in industry and who may well be working in one of the prosperous regions where work is readily available as we do to a man possessing a skill for which the only demand in the locality came from the employer who has just declared him redundant.
As a recognition of past service, the formula has merit, but I do not feel that we are being asked to pay out these large sums as a recognition of past service. That is not the purpose of the Redundancy Payments Act. Now that we are talking of sums of £50 million a year it would be as well if we consider what we are trying to achieve with the payments. The first thing we should be bound to conclude is that the payments are only very loosely related to the degree of personal hardship redundancy has brought to the individual. This is fundamental, and when I say "very loosely" that is exactly what I mean. One can almost say that they are not related at all.
Other aspects will come more into focus as the payments continue. First, an individual facing redundancy for a second time has little hope of any substantial entitlement. It is very largely a once-and-for-all exercise for the individual. In effect, he has exhausted his entitlement on his first redundancy. The longer the Act is in operation, and the more often we discuss payments from the fund, the more material it becomes that an increasing number of people in industry will enjoy comparatively little protection from the Act and will receive comparatively small payments from the fund, even though they may be at an age where they will find alternative employment much more difficult to obtain.
The other point is that while the Act no doubt facilitates restructuring and rationalisation in major reorganisations, in the case of the individual it is a very real hindrance to mobility, because when a man moves from one job to another he writes off his expectation of redundancy pay in the future. This may not be generally appreciated, but it will become more and more appreciated that the man with 20 years' service with one firm who has the opportunity of another job, with perhaps slightly more responsibility and better pay, with another firm down the road will ask himself whether he is wise to move; if by chance his industry is subject to change and he stays with the firm he will receive several hundreds of pounds but if he is made redundant by his new employer he will receive very little.
Therefore, the fact that a man writes off his redundancy eligibility when he changes jobs is a real barrier to individual mobility, and from that point of view we are not helping industrial change by making these very large contributions to the fund.
What conclusions should we draw at this stage? We should examine the possibility of reducing the entitlement of men with long service who are still in the prime of life in exchange for a quicker build up of entitlement in early years of employment, particularly a quicker build up in early years of employment in a new occupation for men of 50, 55, or above I believe that the curve on the table is wrong, that it is too unimaginative and regular in its progression. The table might well be altered without doing any grave disservice to anybody.
I call in evidence for my claim that there is something a little strange about the payments we are making the fact that men aged 45 with nine years' service receive 11 weeks' pay when made redundant, while men with nine years' service, aged 59, many of whom are well over the top as regards obtaining new employment, receive 13½ weeks' pay. That does not seem to reflect the realities of life. Now that the figures are so large I hope that at some opportunity we shall consider making the table more closely reflect the true realities of life, and the fact that as people move their entitlement is very much reduced.
Would not it be more in the individual's interest and more economical if part of the present expenditure from the fund which is now made directly to the employee were made to a new employer in the form of a training grant, where it can be shown that retraining is necessary before the individual can fill a job vacancy? I hope that you will feel. Mr. Deputy Speaker, that this suggestion falls within the scope of the Orders and the question of getting value for the money, and that it will strike a chord in the Parliamentary Secretary's heart.
At present, substantial training grants are available to firms in development areas, and substantial payments are made to firms expanding in them. Under the Industrial Training Act industry is being encouraged to undertake substantial expenditure on those already in a firm's employment. But it might well be in the national interest if some of that effort and expenditure were diverted to retraining those out of work.
I know that much is being done in Government training centres. The Government have succeeded in continuing the expansion in industrial training centres, but there are great difficulties in getting men of mature age with family commitments to attend them. My experience of difficulties of which constituents have told me is that they will hold on perhaps to the last minute rather than go some distance away, so that they see their families only at weekends and have their whole pattern of life changed.
I believe that an imbalance is developing between expenditure on training people in employment and expenditure directed to helping those out of work to regain employment and increase the value of the contribution they can make to the national economy. It may well be that some Industrial Training Act expenditure could be used to deal with the sort of problem the Redundancy Fund is designed to overcome.
The figures involved have now become very substantial. In a former debate the Under-Secretary said that they were industry's expenditure and not the Government's. But they are a pre-emption of the the economy's resources. We must remember that earnings-related benefits have been introduced since the scheme was first devised, and it would be surprising if a scheme that was apt and


suitable in the absence of earnings-related benefits was still the most suitable vehicle now that they have been introduced. It may well be that we can find ways of helping those who have been made redundant to get a better job, and at the same time to benefit themselves and the country whilst reducing the cost of the scheme's operation.
Redundancy is rightly an emotive word. As I said at the beginning, this is expenditure on something very worth while that touches some of the deepest feelings of the people of this country. But that is no reason for allowing a situation which has been shown to be increasingly illogical to continue, and no reason for failing to examine whether we can get better value for the money, and possibly at the same time spend considerably less than £1 million a week, which is what we are talking about this evening.

8.10 p.m.

Mr. John Pardoe: This Order is yet another entry in the catalogue of woe which many of us have been involved in for some time. The history of the Redundancy Payments Fund is an infamous example of the fallibility of government. I do not mean any particular Government, but government in general. I have no quarrel with the principles of the Act. Liberals have long advocated that a man has certain rights in his job and that, when he loses it through no fault of his own, he should be entitled to compensation,
On the Second Reading of the Redundancy Payments Act, my hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) said:
The Liberal Party supports the general principle of the Bill, but I have some reservations to make."—[OFFICIAL REPORT, 15th April, 1965; Vol. 711, c. 113.]
I, too, have some reservations to make and one of them is this Order. Let us look at the record.
The Act came into force in December, 1965. The contributions then were 5d. for a man and 2d. for a woman. The average weekly income was then estimated to bring in £350,000 a week. The right hon. Member for Southwark (Mr. Gunter), the then Minister of Labour, said on Second Reading:
The total cost of redundancy payments will depend on the number of redundancies, the

age and service composition of the workers made redundant, and future changes in earnings since the payments will be based on earnings. None of these factors can be forecast with any precision. We have had to take into account a range of possibilities, using the best information available to my Department. In the light of this, we have proposed a level of surcharge which should, we think, ensure that the Redundancy Fund is self-financing over a substantial period."— [OFFICIAL REPORT, 26th April, 1965; Vol. 711, c. 44.]
Those words "substantial period" ring rather hollow in the light of experience since.
To cover some of these uncertainties the right hon. Gentleman took the power to borrow up to £8 million and a further £20 million, if necessary, with parliamentary approval. The Account for the Redundancy Fund for 1966–67 says that on 1st April, 1966, when the fund had been running a very short time, there was a balance of £2·5 million. But the Account foreword says:
During May there was a substantial increase in the amounts of rebates and other payments and from that time until October the average weekly excess of expenditure over income was about £170,000 with the result that further investment … was no longer possible.
By October, 1966, the fund's resources were so exhausted that the first borrowing from the Consolidated Fund took place in November, 1966. Also, in October, 1966, the right hon. Gentleman laid an Order before the House to increase contributions from 5d. to 10d. for men and from 2d. to 5d. for women, an increase of 100 per cent. for the former and 150 per cent. for the latter. On 15th November, 1966, moving approval of the Order, he said:
Unfortunately, pioneering produces its own problems".
It does indeed.
One cannot lean on someone else's experience; one has to make decisions on the basis of what data lies to hand. I said on that occasion, in referring to the total cost of the scheme that none of the relevant factors— namely, the number of redundancies, the age and length of service of redundant workers and future changes in earnings—could be foreseen with precision, and that only experience would show whether an adjustment was needed."—[OFFICIAL REPORT, 15th November, 1966; Vol. 736, c. 371.]
Once, yes, but surely not twice and not three times.
The right hon. Gentleman went on to say that redundancies since April, 1966


had been running at a rate of about 125,000 a year compared with an estimate originally of 105,000. That was a fairly substantial increase in the estimate, even then. He explained that a higher proportion than estimated of those people being made redundant were over 40, which was increasing theper capita size of the payment. Compared with an estimated averageper capita payment of £130, the average was then running at £180,000. All this meant that the fund had been running at a loss of nearly £100,000 a week on average since mid-April.
The Account published last February refers to the deficit during the same period of £170,000 a week. It is possible that there is one month's difference in the period to which the two refer. But the right hon. Gentleman referred to £100,000 a week on average since mid-April and the Account refers to £170,000. It may be that the month of April constitutes the difference, but it is a rather large difference. What is the reason for these two figures being so far apart?
The right hon. Gentleman forecast that, by February, 1967, when the contributions would be increased, the deficit would have reached £4½ million, which was slightly more than half the borrowing powers. He forecast, too, that the average weekly expenditure between mid-October, 1966, and mid-April, 1967, would have reached £650,000 and he hoped that it would fall to £430,000 during the period mid-April, 1967, to mid-October, 1967. He also said that, since there would be a gradual fall-off over these two six-month periods, the average for the whole 12 months would be £600,000 and that it would return— and this is significant—to what he called "a more normal level" of expenditure, perhaps from the spring of 1968.
We have just passed spring, 1968. I do not know what the right hon. Gentleman's figure was for a more normal level of expenditure, but the Under-Secretary of State has given a figure of £900,000 a week, which is slightly more than twice what the right hon. Gentleman forecast for the six-month period mid-April to mid-October, 1967. In my own speech on 15th November, 1966 I challenged the whole insurance principle of the scheme and said that, in a field where calcula-

tions were so notoriously difficult, it was wrong to try and balance the books from year to year and even, indeed, from six-month period to six-month period.
I objected, also, to a flat rate contribution financing an earnings-related benefit and said that this was the wrong way to redistribute income. I proposed that the increases should be related to the experience of the mis-use of manpower in particular industries, and I cited the American example of a no-claim bonus —a fairly common principle in insurance that we should introduce. This advice was not taken and things have not worked out at all according to the forecast we were given on that occasion, which is not very long ago.
On 13th July, 1967 an Order was laid to increase the borrowing limits. The Under-Secretary of State admitted that weekly outgoings since February, 1967, had averaged over £700,000 instead of £600,000 as forecast. The borrowing had risen from £4·5 million in February to £5·3 million in July. Asking the House to raise the borrowing powers from £8 million to £12 million, the hon. Gentleman optimistically thought that that would be the total which he would require and he said:
My right hon. Friend believes that that £12 million ceiling will never be reached … What I am asking for tonight is permission to provide for a contingency …
The hon. Gentleman ended his speech with words which I then took at their face value. He said:
I emphasise to the House that it is our intention to examine the nature of the Fund, the nature of the contributions, and to report to the House where the contribution level stands and what are the best long term interests of the Fund and how its solvency can and should be preserved."—[OFFICIAL REPORT, 13th July, 1967; Vol. 751, c. 275–6.]
I took that promise of an inquiry to mean, not that he would come back 12 months later for another increase, but that there would be a fundamental, thoroughgoing examination of what was wrong with the scheme and not just with the fund.
Today, we have a further proposal to raise contributions from 10d. to 1s. 3d. for men and from 5d. to 7d. for women and to raise the borrowing power from £12 million to £20 million, which is the maximum allowed under the Bill. We


ought to know exactly why these increased payments have been made necessary, because they have not been occasioned merely by the level of unemployment, as the hon. Gentleman has said.
In another place, on 1st May, Lord Drumalbyn asked how many payments had been made since the Act came into force in December, 1965, and he was told by the Postmaster-General that in the period 5th December, 1965, to 31st March, 1968, 447,700 payments had been made, and I calculate that at 2⅓ years to be 192,000 payments a year compared with the original forecast on Second Reading of 105,000. The Under-Secretary has told us today that the expenditure is £900,000 a week, which compares with £700,000 a week in July, 1967.
So far, I have not mentioned abuses. I accept that abuses of the scheme in the sense of dishonesty are probably very few, but I suspect that by the use of the word "abuse" many of us do not denote dishonesty but draw attention to the way in which the scheme can be used, perfectly legally and even perfectly honestly, as with the television companies, to extract considerable sums, and I do not believe that that was ever the intention or the purpose of the Act.
Unfortunately, the Government seem to know very little about this kind of abuse. In that same Question, Lord Drumalbyn asked how many of the 448,000 redundancy payments were made to persons who also received a cash payment from their employers' private pension scheme, which I would not necessarily consider to be an abuse, and, secondly, how many had obtained new employment without any intervening period of unemployment, which I would consider to be an abuse, though not illegal under the Act. In view of the promise which the Under-Secretary made when he asked last time for an increase in borrowing powers to conduct an inquiry into the workings of the Act, this is an abuse to which he should give his attention and for which he should provide amending legislation.
In 2⅓ years, contributions have gone up by 200 per cent. for men and 250 per cent. for women. I accept that these figures are extremely difficult to forecast, but errors of this kind are ridiculous. It is fortunate that we are

dealing with comparatively small costs, but if errors of this magnitude can be made in small things, they can also be made in large, and it would be monstrous if the House were to let pass a scandalous example of the rottenness of our machinery of government. We cannot pretend to preside over the nation's affairs if we are to base our decisions on errors of this magnitude. The Undersecretary would have been better advised to have come to us with a bingo barrel than the forecast which he has given tonight.

8.25 p.m.

Mr. Kenneth Lewis: I am sure that the Undersecretary must feel rather like Santa Claus, because he is the only Minister who keeps coming to the House, after intervals of not many months, to ask for a bonanza, although it is not a bonanza from which he gains any advantage. It is only a month or two ago since we debated this very subject. We had many quotations from the hon. Member for Cornwall, North (Mr. Pardoe), but I shall make only two. I shall be fair to the Under-Secretary, because I shall quote something which he said in our last debate and something which I said.
The hon. Gentleman said:
At worst, we are in the position of a man going to the bank manager and saying 'We always knew or always feared, or were always prepared '"—
he covered himself in every direction—
'and we told you we were prepared to ask for £20 million. We were prepared for it because we were a prudent customer of this bank. However, we are not asking for that full sum but for something appreciably short of that maximum.'
The hon. Gentleman said that after listening to what I had to say. I had said:
It is my guess that if this goes on"—
that is, constantly asking the House for more money to meet the expenditure involved in the scheme—
The hon. Gentleman will have to come back to the House and have the sum increased from £15 million to £20 million."— [OFFICIAL REPORT, 4th April, 1968; Vol. 762, c. 713–8.]
We are now just preparing to go into the Summer Recess and the hon. Gentleman is asking for an increase of £5 million, which is 25 per cent. of the total


voted in the Act. Come October or November, when we return, presumably, if this money has run out, the Government will have to bring in another Bill.
A deplorable facet of this constant miscalculation, which has been one blunder after another, is that the redundancy fund does not cover anything like all the workers in the country. Most of the nationalised industries are out of it. The firms with their own fund are excluded. The dockers, I think, are out of it. It does not cover a very large number of people.
In the last debate the Minister was talking in terms of a peak claim on the fund in any one week of £850,000 with an average of about £650,000. The figure he gave today is £900,000 in a week—and this is pay-out. If it is £900,000 pay-out in a week now, and we are to accept what the Chancellor had said, that it is not expected that unemployment will go down, clearly unemployment will either go up or, at any rate, if some of the present unemployed get jobs, new unemployed will come into the market, this figure of £900,000 will rise to, not a peak but an average, of over £1 million. These figures show that during the Recess the Government and the Minister will have to look at the working of the fund.
It is generally agreed that redundancy payments to those who are really redundant is desirable. We are now in a position where almost everyone is looking for a golden handshake. They are organising their affairs so that they made sure that eventually they get one. Both union and management in industry are working together on this. If this continues, although the Minister has always said that the fund is paid for by industry, it will become so insolvent that the Government will have to pay up in order to pay the deficit.

Mr. Hattersley: Mr. Hattersleyindicated dissent.

Mr. Lewis: The Minister shakes his head, but if the deficit gets too high, will he put up contributions again, not by 200 per cent. but by 300 per cent. or 400 per cent.? Where does he stop on putting up contributions? He must realise that there are only two options, either the employer and employee increasingly pays more for it, on the stamp,

year by year, or else the Government have to bail out the fund at the end of the day. During the Recess the Government have to consider whether there ought not to be some change in the present set-up.
The Minister has constantly said that the present high redundancy payment has nothing to do with high unemployment but it must have something to do with it. This is clearly indicated by the fact that, as the unemployment figures have risen, so the pressure and the claims on the fund have increased. We are adding to unemployment. The fund bites on the 50 to 58 age group and is a direct incentive for individuals to seek to make themselves unemployed, and for firms to assist. If they are made redundant in this age group they get the maximum out of the fund.
If the Minister analyses the figures he will find that the total sum, or the largest percentage of this sum, is made up of payments to those put on the labour market at the age of 50 or over. This is not desirable from a national point of view. Those whom we should be making redundant, in order to get mobility of labour, are those in the 30 to 40 age group. The man over 50 is disinclined to want to be retrained, in many cases is incapable of being retrained, and in most cases will not move away from his home at that age to another place of employment, which is the only justification for him being retrained. When a man in his fifties is made redundant, he gets another job in the same capacity in the same area and the Government have paid out money which is not assisting in any way the Ministry's main endeavour to secure mobility and retraining.
In many cases, the fund is being used to provide an increased payment in advance of pension. If a man is to receive in a year or two a modest pension, it is a good thing if he is given £1,000 or more to set him off. This is something which has never happened before and which people are naturally inclined to clutch at. No one on either side of the House would want to suggest that they should not seek to get it if they can. But plainly Governments must concern themselves with the cost. If they must come to the House every four months and ask for another £5 million to pay the bill, sooner or later there will be a very heavy clamp down on the pay out.
If the Government get themselves into a situation in which they have to climb down and to cut the payment to £500, many people will have got away with a very high payment and those who come afterwards, once the clamp down takes effect, will find that they are treated less well than others. It is the Government's responsibility to ensure that they run their affairs in such a way that an Act authorising redundancy payments runs smoothly for a long time rather than that they should constantly have to ask the House for authorisation to amend the regulations or for more money to keep the Act going.
One of the main proposals put forward when we were debating the original Bill was that it would bring about the dispersal of labour throughout the country. It is interesting to note that the Ministry of Housing and Local Government is going contrary to these Orders. It is suggested that there should be a build up of housing in areas which need it most where there is less unemployment and where industry is most busy—in Birmingham, the Midlands and London. These areas are to get an extra £20 million—

Mr. Deputy Speaker (Sir Eric Fletcher): Order. It would be a mistake to pursue that subject on this Order.

Mr. Lewis: I accept what you say, Mr. Deputy Speaker. I was simply suggesting that the amount of money being paid by the Government to keep people in particular areas is going contrary to the payment of money by means of these Orders. The purpose of the Orders is to get people to leave their areas and to disperse to other parts.
The right hon. Lady the First Secretary of State is making speech after speech in the country in favour of increased productivity. How far is this expenditure of £20 million helping to increase productivity? If we get rid of people in their fifties and they are not redeployable, clearly this does not help the firm which wants to obtain highly skilled labour. New jobs are not being created if there is redundancy at the wrong age level and if there are redundancies among people who are disinclined to retrain.
The last time when such Orders were debated, the Minister admitted that it

was necessary to increase the training facilities made available by the Government. Those facilities are still totally inadequate. Those who are being trained are not in every case acceptable. The Donovan Report, which was issued a few weeks ago and which we debated last week, makes it clear from the evidence that the trade unions do not yet accept those who come out of the training centres as being sufficiently acceptable for the highest skills that are available.
The Minister must, therefore, do two things. He has to get the right people into the training centres. Certainly, the fund is not succeeding in that respect. Once the Minister has got the people into the centres, he has to make sure that they are put where they are needed, where productivity in the newer industries is vital to the country.
We have been told many times that the fund is paid for by industry. I have indicated that if it continues to have such high claims made against it, sooner or later the Government must bail it out. It is not even true to say that the fund is paid for by industry. Governments tend to load upon industry tax after tax. payment after payment. Not only has industry to pay the Corporation Tax, but it had the Selective Employment Tax increased in the last Budget, the cost of insurance stamps goes up and now we have—

Mr. Deputy Speaker: Order. We cannot go into all those wide subjects on this Order about the Redundancy Fund.

Mr. Lewis: I accept that, Mr. Deputy Speaker. We now have the situation, however, that the Minister has to increase the payments imposed upon industry for the redundancy scheme. My point is that this increased payment which is imposed upon industry is on top of everything else.
The Minister has on many occasions said that this is something for which industry pays because industry derives the benefit. Some industries get the benefit while others pay. I hope that the Minister recognises that the firms which are best organised and best managed, which have their labour force right, have a minimum of redundancy. Therefore, they are not the firms which make claims upon the Fund. They still have to pay the piper. They still have


to meet the cost. They still have to pay for the mismanagement of the Government when they increase the charges or when they come to Parliament and ask for an extra £5 million. Therefore, the Government are imposing on the better-organised and better-managed firms impositions which result from their own mismanagement.

Mr. Pardoe: Would the hon. Member follow that line of argument by accepting my suggestion that we should follow the American example and institute a no-claim bonus, thereby ensuring that those people did not pay for the sins of others?

Mr. Lewis: I accept that that would be a reasonable suggestion. I am certain that the hon. Member is correct to the extent that if the fund continues with the same pressure upon it, and with the demand upon industry and upon the Government's loan fund, there will be an outcry from the companies which derive no advantage but which constantly have to pay the bill.
I notice that when the Government come to the House for this kind of money it is always at that period when we are near the Recess—it was so the last time —when we are all very tired, when we have had enough, and when they think that they therefore can easily get away with £5 million. But I hope that the Government will bear in mind that, in so far as this scheme is paying out money, it is also providing the Government with increased income in the form of taxes. I see the Under-Secretary looking at me inquiringly; but if he is insistent that industry must pay for this, if he is intending to ask the House again for this money, and if the Government are not prepared to provide any subsidy for the fund whatsoever, will he bear in mind that everybody who receives a redundancy payment receives it less tax? Perhaps he will add up the amount paid out in redundancy payments and take off the amount which goes to the Chancellor of the Exchequer, because the recipients of redundancy payments do not get them tax free; they do not get them net, and the Government, in charging industry for the whole of this, are in fact making a profit out of their imposition.
There are two points I want to mention about the cost of running this scheme.

We have a system of tribunals. Will the Minister look at what those tribunals cost? We have not been told, and I should like to know what they cost. Anyone can apply to a tribunal. I understand that anyone coming to a tribunal in London, or wherever it may be, can get travelling and subsistence allowances, and if he has to be away from work to attend the tribunal he can get the pay he loses for that day made up. At any rate, this must be a quite expensive operation, and the Government cannot refuse to allow to appear before a tribunal anyone who claims that he should have had redundancy payment.
Finally, on the guaranteeing of payments. If a firm is unable to meet its share of redundancy payment the Government make it up. This is correct. There would be a great disservice done to individuals if a firm failed to make its redundancy payments. The individuals would suffer, and so the Government make them up. How much is this costing? How many firms have been unable to meet their obligations to make redundancy payments? If the cost goes up there will be many more firms in that category.
I believe that this is the last time when we should be asked to vote a sum of money of this kind, when the Minister is reviewing the whole operation of the Act, because I do not think we can go on constantly increasing the charges to industry and to employees and at the same time loading the Government's Loans Fund with further sums of this order.

8.45 p.m.

Mr. Edward M. Taylor: I must apologise to you, Mr. Deputy Speaker, to the Undersecretary of State, and to my hon. Friend the Member for Paddington, South (Mr. Scott) for not being present at the beginning of this debate. I was involved in a meeting just outside the House with some people from Glasgow, and at that meeting the issue of redundancy was very much discussed.
I came into the House to hear the debate on this very important Order, and I was truly astonished to find that I would have an opportunity of getting off my chest some of the things I wanted to say about it. I honestly thought that


there would be a large number of Members wanting to take part in the debate. In these circumstances, it is a great and unexpected pleasure for me to make a speech on this Order. I hope that the Under-Secretary will forgive me if I mention some points with which he may already have dealt.
It is felt that this Order does not matter very much, since we are talking of sums of 10d. and 1s. 3d. This is a 50 per cent. increase, but when we are accustomed to talking of millions and tens of millions—I was astonished to learn, through a Question raised by the hon. Member for West Ham, North (Mr. Arthur Lewis) of an error of £133 million in a Budget memorandum a few months ago—people wonder whether this Order matters. But, in stark reality, when one considers that the redundancy payments scheme involves £76 million over two years, it is clear that we are talking of a very significant sum.
I hope that it will not be thought that I think that the scheme is a mistake, but hon. Members will realise that we have created something which could be frightening and alarming and could commit us to substantial expenditure, which might get out of control—not through deliberate Government policy, but simply because the scheme could gather momentum and involve a great deal of extra money.
A speech was made some time ago about sacred cows, and it was suggested that, with devaluation, there must be no sacred cows. I am afraid that this scheme is a sacred cow which has come home to roost with a vengeance and a great bang—

Mr. Anthony Stodart: A cow has never been known to roost.

Mr. Taylor: I thought that my hon. Friend was about to suggest that sacred cows should get the £12 subsidy for the upland areas, and I am glad that he did not, because the economy could not stand it. But I am grateful for his interest in my speech. He always listens to speeches with great interest and speaks with the profundity which one expects of him.
I was saying that there was a danger that the redundancy payments scheme

might get out of control and cost us sums which were not anticipated when it was introduced. This Order is yet another indication that the sums involved will be greatly in excess of the amounts envisaged at the time.
Some of the criticisms of the scheme are mistaken and somewhat false, but one of the advantages of an Order like this —as with the Measures on the borrowing powers of the Nationalised industries— is that it gives us one of our rare opportunities to review a scheme and to make some suggestions for improvement. It is a sad fact that periodic reviews are all too rare in the House. I know that, in agriculture, for instance, in which my hon. Friend the Member for Edinburgh, West (Mr. Stodart) takes such a great interest, there are the Annual Price Reviews, on which we can discuss the progress of agriculture and what changes should be made. Although agriculture is not a main employer in my constituency—there is not one farm there—these debates are, I think, of a high standard and allow us to review general policy in that sphere. In that way, this debate gives us an opportunity to review the Redundancy Payments Scheme and see what changes might be made.
Some of the criticisms which have been made about the Scheme are somewhat unfounded. It has been suggested, for example, that the cost of the Scheme will hold back progress in that employers who might otherwise dispense with their employees and instal labour-saving machinery might, because of these provisions, not change over to machinery but hold on to their employees. This criticism cannot be treated seriously because I calculate—not having been a member of the Standing Committee I may be wrong; I hope that the Minister will correct me—that even for an employee who has served his employer continuously for 20 years, the payment to be made by the employer for that man will be only seven weeks' wages. The total amount paid to the man will be much greater, but the larger part comes from the fund.
If the amount to be paid by the employer is more—perhaps nine or 11 weeks' wages—I still do not believe that it will prevent him from dispensing with his employees and going over to labour-saving machinery. Some industrialists


have said that the existence of the Scheme prevents them from dispensing with employees and installing labour-saving machinery. I feel confident that if the machinery in question is of real value, the existence of the fund will not act as a deterrent.
The scheme has also been criticised because, it is said, it discourages the mobility of labour. The most obvious example given is that of firms which wish to take advantage of the redeployment going on in Scotland. For example, a firm in Glasgow might decide to relocate itself in one of our exciting new towns at, say, Cumbernauld or East Kilbride. The firm's employees might be offered jobs in the new town, but since that might involve some of them in uprooting their homes, moving their children to new schools and so on, they might consider it an unreasonable offer and wish to take redundancy payments instead. To that small degree, the existence of the scheme might have a limited marginal effect on mobility.
However, that is nothing compared with the freedom of action which is given to an employee who is made redundant after giving years of service to an employer. Such an employee has a lump sum with which he can perhaps buy another house in another area and spend a little time finding suitable employment. Thus, weighing the advantages and disadvantages of the scheme, I conclude that its existence does not hold back mobility.
It has been said that the tribunals are too expensive. The increased contribution, from l0d. to 1s. 3d., is important in this context because many people would like to know what proportion of the 1s. 3d. will pay for the cost of administering and operating these tribunals.
There have been criticisms, but very often criticisms come from those who have not had the opportunity of appearing before a tribunal. I have had the opportunity of appearing before a redundancy tribunal on behalf of a constituent, and I was impressed by the completely impartial way in which they considered the facts, and the trouble which they took to go into the details of the case. The tribunals have a record to be proud of.
While saying that, I think the Minister will accept that the scheme could be improved in one or two small matters of administration. There have been alarming stories about the travelling expenses of those who appear before a tribunal. It may be that some of the stories have no validity, but it is obvious that the scheme allows for abuse.
If, for example, I wanted to bring an entirely bogus claim against an employer in Inverness, Wick or Orkney, no matter how hopeless and invalid my case, I would be entitled to receive my travelling expenses. If one were thinking of having a home holiday this year, under the scheme it would be possible for abuses of this sort to take place.

Mr. Hattersley: I suggest to the hon. Gentleman that for the abuse which he had in mind to operate he would have to be a man who was employed by an employer in Wick and who lived in London. Such persons could hardly be sufficient in numbers to make a large contribution to the cost of the scheme.

Mr. Taylor: I am grateful to the hon. Gentleman. I was being helpful and trying to abolish the general arguments made against the administration. It is fair to say that there could be bogus cases in which substantial claims for travelling expenses would be involved. For instance, a person might come from Wick to London to see the lie of the land and then decide to go back to Wick. The easiest way of getting his fare paid would be to bring a claim, however bogus, against his previous employer.
In the event of a person coming from Glasgow to London and not liking what he found in London, and perhaps not finding the people of London so congenial as the people of Glasgow, is it or is it not the case that he could get back to Glasgow at the State's expense by bringing an action under the Redundancy Payments Scheme against his previous employer?
I do not join those who make a blanket condemnation of the administration of the Redundancy Payments Scheme; far from it. I have been doing my best to praise it, but may I draw attention to an anomaly? I have received a personal complaint from a major building employer in Scotland with an excellent record. The firm is concerned that some


of their employees of long standing are approaching foremen and asking to be included in the next redundancy. These are men of perhaps 60, 61 or 62 years of age who know that if they stayed in the employment of the firm until the retirement age of 65, and then retired, they would get nothing, but if they could be included in a redundancy they could receive a substantial amount of money in view of their long service.
Having in mind the increased amount of money involved in the Order, the Minister should ask himself whether any of that increase can be accounted for by that kind of abuse. Perhaps to call it an abuse is wrong. Rather, it is an anomaly that can arise from the detailed application of a measure which brings many benefits as well as anomalies. I understand that the case of this building firm has been brought to the Ministry's attention and that the Minister has already given it careful consideration, but can he see any solution of the problem without destroying the whole basis of what is a good scheme?
The Minister should tell us whether this sudden increase in the global expenditure will accelerate in the future. All the indications lead me to believe that the amount involved will accelerate very substantially, bearing in mind the present state of the economy and the changes in trends of economic development. We all know that unemployment will increase substantially over the next few months. That is inevitable in our present economic circumstances, and that event will result in more substantial payments from the fund. That may be one of the reasons why the Order is now before us.
Unemployment involves a sum that we can assess, and is under some degree of control. Therefore, while increased unemployment will result in larger claims on the fund, it will be a once-for-all amount and one that can be estimated and reasonably controlled. I know that the Minister does not like the prospect of increased unemployment but we know that it is ahead. Whether it will be as a result of the Government's economic policies we cannot now discuss.
I can think of five different factors which will in themselves result is escalating claims on the fund—not the once-for-all increase that unemployment can bring about, but something that will gather

pace. The first and obvious, of which the Minister will be well aware, is the factor of structural change in industry mentioned by Lord Beveridge in his famous Report at the end of the war. I know that I need not explain this to my hon. Friend the Member for Dumfries (Mr. Monro) who has a case in his constituency. He has been fiercely defending one of his own constituents in just such a matter No one has fought harder than he for his own people. Whether or not the particular mine about which we are talking—

Mr. Deputy Speaker: Order. The hon. Member cannot pursue this line of argument on this Order.

Mr. Taylor: I would not think of it, Mr. Deputy Speaker. I was merely making a passing reference.

Mr. Deputy Speaker: The hon. Member really ought not to make a lot of passing references to matters that are out of order.

Mr. Taylor: I was taken away by the sight of my hon. Friend sitting there on the Front Bench—

Mr. Deputy Speaker: It is more important that the hon. Gentleman should obey the instructions of the Chair.

Mr. Taylor: Then I will come back to the detail of the Order.
The application is to increase the contribution in respect of the average male employee from l0d. to 1s. 3d., and I should like to know the extent of the structural change in industry that accounts for this increase. What period has the Minister in mind? Is it one year, two years or three years? Is he keeping in mind the very substantial escalation of structural change in industries like ship building and coal mining which will inevitably take place?
When considering this Order and the increase in this sum, the Minister has an obligation to tell us to what extent he has taken structural change into account and the kind of time-scale he has in mind. Probably he thinks the Order enough to keep the fund going for 12 months, but to what extent has he taken this factor into account? There is a 50 per cent. increase in the amount of money the Government hope to raise. To what extent have they taken into account the


factor of automation and all the changes in the pattern of industrial development? Every new move in automation can create redundancies, and many redundancies make calls on the fund.
The policies of the Government themselves obviously will cause a substantial increase. That probably is one of the reasons for this Order. We have seen small increases in national production and a declining manufacturing labour force. This is a substantial change. If new wage patterns in the engineering industry are to be negotiated on Friday in London—and I hope they will be successful—we shall see a further step forward in productivity. In bringing this Order to the House and making the calculations, to what extent has the Minister taken account of the Government's policies for productivity?
Can the Minister explain in relation to the Order what calculations he made and on what calculations he justifies the figure in the Order? To what extent did he take account of the changes which will take place as a result of new trading arrangements by this country? I am thinking of new arrangements such as N.A.F.T.A.S.
One of the greatest and most significant factors which I fear the Minister may not have taken into account is the changing attitude on the part of individual employers, who pay the 1s. 3d. under the Order, to what I might call lame ducks of industry, men who have served a firm well, who have given so much and asked for so little from their firms. Many employers have had a serious practice of regarding it as their responsibility to look after a particular employee who will be covered by the Order and by the scheme. Would those employers not be doing a greater service if they were to say to such men, "We have no job for you. We shall put you out at 62 or 63, but you might find yourself with a payment of £800 or £1,000." Would it not be better for them to do that than to give them a handshake or a pat on the back?
There is a change in the attitude of some employers in this respect. I wonder if the Minister has taken account of the fact that more and more employers who might have kept redundant employees because of their long and loyal service

may consider that it is in the interests of those employees of relatively advanced years who have no great contribution to make to their firm to say that the best they can do for them is to show them the door, however regretfully and sadly.
I hope that these remarks have not appeared to be destructive, because they were not so intended. I would not want anyone to infer from my few brief remarks that I am opposed to the scheme or that I think that it is a bad one. It is very valuable. We always want to improve something which we regard as valuable.
Therefore, I want to make one or two suggestions about the kind of changes which I hope that the Minister will be able to tell us he is considering in relation to the figures he has presented. The hon. Member for Cornwall, North (Mr. Pardoe) suggested that there should be a no claims bonus scheme. It was encouraging to hear a constructive comment from a Liberal Member. Such a scheme would be of great value. I mentioned the case to the Minister— he showed great interest in it—of a Scottish building firm. We could help by having a no claims bonus scheme.
Mention has been made of people who are put out at 63 or 64 because they know full well that if they stay on until they are 65, they will get nothing. We must make some provision for this. One of the sad things about our whole Welfare State, a question which we can discuss on the Order, is that it encourages people—

Mr. Deputy Speaker: We cannot discuss the whole Welfare State on the Order.

Mr. Taylor: I am sorry, Mr. Deputy Speaker. I am trying very hard to keep strictly to the rules of order. I was hoping to make only one or two brief points. I will come directly to them.

Mr. Deputy Speaker: The hon. Gentleman must not only keep to order. He must also avoid tedious repetition.

Mr. Taylor: Mr. Deputy Speaker, I greatly respect your opinion. I do not think that I have repeated anything at all.

Mr. Deputy Speaker: Order. I said that it is important to avoid tedious repetition.

Mr. Taylor: I am very grateful Mr. Deputy Speaker. I was thinking that in some way you were suggesting that I was committing tedious repetition. I am very grateful indeed for that assurance, because, as you know, Mr. Deputy Speaker, there is no person in the Chair whom I admire or respect more for his judgment than yourself; and I certainly would not like to annoy or displease you in any way at all. On the other hand, I think from what you have said that you were almost suggesting that I had gone on for too long. Having looked at the clock, I am alarmed to see for how long I have spoken.
As I said at the beginning, I feel very strongly on this issue. I have not had an opportunity of speaking about it in any way before. I will try to bring my remarks quickly to a conclusion. I was saying that the hon. Member for Cornwall, North suggested a no claims bonus scheme. Was the amount fixed at 1s. 3d. as opposed to 1s. 5d. or 1s. 6d.—although I would not wish to add to the costs on industry, I think that 1s. 6d. could be justified on the basis of the figures which have been put before us of the escalation in the claims on the fund—because the Government are thinking of the introduction of a no claims bonus scheme or of arrangements for contracting out? I hope that the Minister will be able to give us an assurance along these lines.
As previous speakers have said, we are considering not one Order, but two Orders. One Order suggests one means of providing finance, namely, by the stamp, through the amount paid to the Fund in respect of each employee. The other Order considers a second way of providing finance, by drawings on the National Loans Fund. We see the frightening suggestion that, in place of the £8 million which has been the position up to now, there is to be the very substantial amount of £20 million.
Can the Minister give us some indication of whether this is the last Order of this sort which will be presented? Will he commit himself to saying that all the financing of the scheme as from the time of this Order will be done by Orders of the type of the Increase of Contributions Order and not by means of the National Loan Funds (No. 2) Order? When one starts borrowing

money, as is proposed under the second Order, to keep the fund going and solvent, there is a terrible danger that that kind of thing can gather pace so that we find ourselves before long with a scheme financed more and more by Government borrowings and, therefore, becoming basically more insolvent.
The Minister should take his courage in his hands, face the world, and say, "We have a good scheme, a good scheme which should be self-supporting, a scheme from which we shall try to take away the minor abuses to which reference has been made, a scheme from which we shall try to take away the little injustices, a scheme from which we shall try to take away excessive costs of administration. It is a worthwhile scheme, a scheme which will wash its own face".
That is the situation which I should like to see, and I hope that the Minister will at least give an assurance that that is what he is aiming at, that he wants to wash his own face in the context of this scheme. Although, in the present difficult economic climate, it may be necessary to increase the borrowings which we make through the National Loans Fund to £20 million, and we can accept that as a temporary measure which might be justified in present circumstances, will he give a cast-iron undertaking that his long-term intention is not to keep the scheme going by added borrowings from the National Loans Fund but to have the scheme self-supporting and self-financing in its own right? I am convinced that, if they have a scheme, arrangement or plan which is pleasing to them, which they think is socially just, equitable and desirable, the people of this country will be prepared to make the contributions to make it work.
I have tried to go through my points as quickly as possible, but I have not got through a third of what I had hoped to say. The rest will have to remain unsaid, since I realise that many of my hon. Friends and hon. Members opposite wish to contribute to the debate. I shall, therefore, disregard the other part of my speech which I had hoped to make— [HON. MEMBERS: "NO, go on."] I am always tempted by these encouraging comments from my hon. Friends, who are always generous in such matters, but I feel that I have a duty to hon. Members who wish to take part.
I hope that the Minister will accept what I have said as constructive and helpful in some small measure. I hope that we can look forward to the time when the scheme is entirely self-financing and that the various little anomalies will be removed. I hope that the hon. Gentleman will say that, but let him not be ashamed of these Orders. Let him not be ashamed of the scheme and the fund. It is a good scheme which was well-intentioned; it has serious problems of escalating costs, but I am sure that, with good will on both sides, with good sense and with sound economy, we shall overcome those problems. Let us hope that we can achieve all these aims and look forward not to having more of these Orders but to having a proud self-financing scheme which will be a credit to the country, a help to our economy, and a real help to people in need, to those who find a scheme of this kind of great value to them in their personal problems.
In the circumstances, while we have concern, while we have worry, and while we have alarm, we think that the scheme is in itself basically sound and basically socially desirable.

9.23 p.m.

Mr. Robert Carr: I hope that I shall not disappoint my hon. Friend the Member for Glasgow, Cath-cart (Mr. Edward M. Taylor). I am not sure that I shall do any face-washing, either my own or the Minister's. If I run true to what I am told is my form, I shall be at a rather more gloomy task. The last time I spoke in the House, I was accused by one of the national newspapers—the Tory Press, by the way—of speaking and looking like an undertaker. However, I hope that I am safe at least tonight, seeing that the Gallery whence these comments come is almost empty.
No one could accuse the Undersecretary of State of speaking in the House like an undertaker. No slow, solemn step or long countenance for him. He always dashes at his subjects with great buoyancy and enthusiasm, including, as we have noted tonight, the task of estimating or forecasting the level of contributions needed to keep the Redundancy Fund solvent.
This has been a very useful debate. It is right that a scheme of this kind should be debated not only when we have

to find more money, although that is, unfortunately, the occasion which gives us an opportunity for the debate. It is right that it should be examined. I find it both disappointing and extraordinary that not a single hon. Member opposite, other than the Minister, has seen fit to speak in the debate, which the old traditions of the Labour Party—certainly its traditions and practice when I first came to the House—would have brought forward many speakers, whether the party was in power or opposition.
As my hon. Friend the Member for Paddington, South (Mr. Scott) made clear, we have no wish to oppose the Order. We support both the social and economic intentions of the Act. Like my hon. Friend the Member for Cath-cart, I agree that it has eased mobility and has, therefore, served the economic purpose which we had in mind, doing so in a way which has eased human problems at the same time.
We believe, particularly in the light of our experience on this Order and previous increases, that the time is coming nearer and nearer when we should not only examine more thoroughly the working of the scheme, but should also consider more effective ways of achieving the same economic and social purpose which it was introduced to serve. But it is the scheme that we have at present, and we should not dream of doing anything but support the Order and make sure that the fund is made to remain solvent until a better alternative can be put forward.
I shall not repeat all the detailed questions that have been put to the Minister, but we should not let the Order go through without calling the Government to task over their forecasting. We cannot allow the Minister to get away with his statement that it was really impossible to forecast, that the extra increase had nothing to do with inadequate forecasting. If it was impossible to forecast—and we can all see how difficult it must be—it was at least obvious that it would be impossible to forecast when the Act was first introduced or when each successive increase was made. The sudden impossibility to forecast contrasts very strangely with the certainty which the hon. Gentleman and other Ministers expressed over the past few years about the forecast income and expenditure of the scheme.
The failure of the forecasting is not small. The margin is enormous, and there must be an explanation for it. With the record the scheme now has, we should hope that our Public Accounts Committee will take a look at it and give us all the information on it that it is possible to find. My hon. Friend the Member for Paddington, South gave quotations to show the certainty and assuredness about forecasting that we had in the past. Now we are suddenly told that it really is impossible to forecast. We find this difficult to believe. It may have proved more difficult than expected, but it cannot be as impossible as it now seems to be.
The other reason—or rather non-reason—we were given was that the need for the increases had nothing to do with unemployment persisting at a higher level than expected. The Government can never lose on a statement of that kind because, when one asks them, as we frequently do from both sides of the House, to tell us what sort of level of unemployment they are estimating for, they become extremely coy.
It is only the Prime Minister who sometimes gets carried away by his usual optimistic ebullience and talks at least in general terms, and as my hon. Friend the Member for Paddington, South pointed out, is once again proved wrong in these general forecasts. But when the Under-Secretary of State tells us that the reason for these increases is not because unemployment has been persisting at a higher level than expected, this, of course, means nothing whatever unless he will also tell us what the level of unemployment was that had been estimated by the Government.
As we have pointed out on a number of occasions, while we realise that it would not be wise for the Government to try to forecast precisely or even to give figures to their estimates, some indication of their estimate of trends could do a lot at times to improve confidence or to remove fear—either to give hope that the unemployment situation would improve in absolute terms or at least to damp down what might be exaggerated fears about the extent to which it is going to increase.
The hon. Gentleman cannot get away with the suggestion that the increases in redundancy fund payments have nothing

to do with the unemployment figure. They must have something to do with it because, by definition—although, of course, the linkage is indirect—there must be some linkage between rising unemployment, and, therefore, people losing their jobs, and the payments from this fund. We should have from him a closer and convincing analysis of what that linkage is.
At one time, the hon. Gentleman seemed to be arguing almost in a different direction. He said that at least the success of this fund was proving that people were going in and out of the labour market and were staying there only a short time. This indicated that the cost of unemployment would be increasing calls on the fund. But that is not the story told by the unemployment figures as published. We cannot get away from the fact, mentioned by my hon. Friend, that, in January, the proportion of unemployed who had been out of work for over 8 weeks was 50 per cent. and that, six months later, in June, it had risen to 68 per cent.
This has been the case over the last year or two. The figures seem to be showing that long-term unemployment is rising and this does not correspond with the picture the hon. Gentleman was painting that the calls on the fund show a lot of people moving in and out of employment, redeploying themselves in a purposeful sort of way.
I was rather shocked by the hon. Gentleman's attitude to costs. He said that one quarter of 1 per cent. of labour costs was the overall cost of the redundancy scheme. The hon. Gentleman said that this increase represented 1/10th per cent. of labour costs. However, as my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) and others have pointed out, all these little percentages might seem insignificant on their own, if they were on their own, but they are not. They are accompanied, if not at precisely the same time, by increases in S.E.T. and other increases in taxation of one kind and another and all these quarters of one per cent. add up to a substantial extra cost on industry which in the end is reflected either in the price of goods in the shops, or, to some extent, in less new investment to build up future industrial efficiency.
This extra increase represents another £8,500,000 on industry's bill in a year. Coupled with the increase in the Budget, which at Budget time was said to be enough to see us through without any further increase in the short term, I estimate it to add an extra cost to industry of some £14 million or £15 million a year. Therefore, lack of estimation and the extra costs for industry are serious matters.
I hope that the Under-Secretary will not only go deeply into all those questions but will give us a greater assurance that the scheme and its working will be considered in depth. He referred to some small sample survey. I hoped, and I thought that I had understood from reports I had read, that something more substantial was going on. I hope that he will confirm that and give us some idea of what that is and that he will say that the payment will also be considered, because it is a flat rate payment, a poll tax.
When we started at 5d. for men and 2d. for women, the amount per person was sufficiently small to make any idea of graduated contributions and graduated payments seem unnecessary, but now that it is 1s. 3d. for men and 7d. for women we are beginning to reach the level of contributions when the pros and cons of converting it from a flat rate poll tax into a graduated contribution related to the wage level of the person concerned should be considered.
A review is also needed to make sure that there is no abuse. I agree that there is probably much more smoke than fire in all the talk about abuse of the scheme, but it is probably also true that where there is smoke, there is fire, even though the fire is small, and we have to admit that the possibilities for abuse are enormous, and we can all think of one or two things. There is no doubt that abuse occurs and that people ask their employers to make them redundant. I have personal experience of this. One hopes that employers will not connive in it, but it is also true that because employers get back such a large percentage of payment from the fund, it is very easy not to contest a case and certainly easy not to fight a case which goes before a tribunal. Why incur all the odium as well as the trouble of fighting a case if the net cost is so small? There is, therefore, a case for

seeing whether this balance of direct contribution reclaimed from the fund is right.
There are many other possibilities of abuse. An inquiry into these should be carried out seriously. Abuse of this kind in social services can bring the success of a scheme into disrepute and lose it public support out of all measure to the actual scale of abuse. As my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) pointed out, any review ought to consider whether the application of this fund is right. He made a number of suggestions relating to the age scale, which showed the sort of need which ought to be met, and which is not being properly met.
From this sort of review we ought to move on to the question which I raised earlier, whether, in the long run, this is the best sort of scheme to give the most help to those who most need it. There is evidence that there is a possibility that much money is being spent on the scheme and is not always going to those in greatest need. I hope that as well as answering these specific questions, the Minister will be able to give us some assurance about a searching review, which in the last resort will lead to the discussion as to whether this is the best scheme for the long-term future. The Minister must not expect to come in the future, if there should be need for legislation to raise the borrowing powers under this scheme, without being able to lay before the House a report on a detailed inquiry showing whether this is the best method of dealing with the problem.

9.42 p.m.

Mr. Hattersley: The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) began by apologising to his hon. Friend the Member for Paddington, South (Mr. Scott) for missing his speech. He then went on to congratulate him upon it. My judgment upon his speech is clouded by having heard it. Notwithstanding that, I thought that it was admirable. I even enjoyed those small passages of it which did not consist of quotations from speeches that I had previously made on the subject. The hon. Member had hard things to say about Government forecasting. I am not surprised and I do not begrudge him them.
Certainly, estimates that I have given to the House, and that my right hon. Friend has given, have proved wrong. The hon. Gentleman listed them and I did so before him. I must tell him that all our estimates, inaccurate though they have proved, have been more accurate than anyone else's. When the scheme was originally advocated in the House we were told by the Opposition that the original levy of 5d. and 2d. was almost certainly too high. As I told the House two hours ago, when we suggested a year ago that the increased contribution should be 1s. and 6d. both sides of industry, the C.B.I. and the T.U.C. thought that we were being pessimistic about demands on the fund.
I do not believe that we have been over-pessimistic or optimistic. We have tried to be as realistic as we can be, and at the same time obey the principle and belief that we should not charge industry any more than seemed necessary to maintain the fund in viable and continual existence. I must tell hon. Members opposite how difficult the problems of forecasting outgoings from this fund are. Changes in the level of unemployment from one month to the next are not directly correlated to outgoings from the fund. I would remind the House of the examples I gave in my initial speech. The real level of unemployment—and it will be realised that it is not the seasonally-adjusted unemployed who get redundancy pay—falls during the spring. Yet the number of redundancy payments has also fallen, and those two things seem to be arithmetically absolutely consistent. Despite the fall in those two figures, the outgoings from the fund have increased—because perhaps the new unemployed are older, because perhaps they have longer service, because perhaps they are more highly paid. For all these varliable reasons, the problem of calculation becomes difficult to the point of impossibility.
While I sympathise with hon. Members who say, "Is not this a task for actuaries? Is not this what actuaries are about?", I remind them that actuaries are likely to base their calculations on experience and precedent and that we have only a few years' experience of this scheme. There is certainly no scheme in which the precedents are comparable, in which the variables are so many and

in which, in addition to the existing variables, there is the additional alteration which may come about in the level of industrial activity.
I concede that the number of new unemployed is one of the figures which have an effect on the number of payments, but it is only one of the figures; it is no more than that. It may not even be the most significant figure. We always knew that it was difficult to make this sort of calculation. That is why, in the Order, we allowed for borrowing powers to tide us over difficult times when our contribution level proved inadequate. That is why we have constantly understood the necessity to keep the situation under review. I shall return to the review situation before the end of my speech.
Before doing that, I wish to deal with the oft-repeated claim that part of the difficulty in which the fund now finds itself stems from abuse. I think that confusion continues about what abuse amounts to. There are, I suppose, two sorts of abuse—at least, we have heard of two sorts tonight. One is literal abuse, and the other is abuse only in the minds of the critics. The first is literal dishonesty. The accusation usually takes the form of the suggestion that there has been positive collusion—that a company and a company's employee have agreed to pretend that there was redundancy when there was not. Invariably, on examination and analysis, that sort of accusation proves to be groundless.
The hon. Member for Paddington, South drew attention to a newspaper report about alleged collusion in Peterborough. The collusion consisted of two firms which were related, with a man being declared bogusly redundant from the first and receiving a redundancy payment and then being re-employed immediately in the second in the knowledge of the first company. On investigation, that claim proved to be totally false, and the newspaper published a correction and apology. This is perhaps typical of the sort of accusations which have been made about that sort of literal legal abuse.
Certainly, we have mounted many investigations as a result of allegations of that sort, but none of our investigations has led to prosecution because, on our experience and on examining the accusations made to us, our conclusion has been that while there is the opportunity


for abuse, as there must be in a scheme as large and complicated as this, the actual incidence of abuse is negligible.
The second sort of abuse—and I emphasise that it is abuse in my view, only in the minds of the people who claim it to be so—concerns an employer who knows that a percentage of his work force is likely to be made redundant and offers his work force the opportunity to opt for redundancy if a portion of it chooses to do so. For example, the company with, say, 500 employees which says that 50 must be paid off on the first of next month and is prepared to take 50 volunteers.
Clearly, the 50 volunteers are likely to be men who say, "Regretful as I am of the prospect of redundancy, the blow is softened by redundancy pay and I will volunteer for redundancy because, by my circumstances, by my age, by my service, by my wages, I am likely to receive a substantial sum"; and the more substantial the sum, the more likely they are to volunteer for redundancy.
This does not seem to me to be an abuse of the scheme. Indeed, it seems to be a way in which redundancy can be carried out without friction, with the minimum of hardship and with a positive contribution to industrial relations rather than the industrial relations of the firm deteriorating.
It is important to understand that some of the objects of the scheme can be achieved only if management and men operate the scheme to their maximum mutual advantage. By my calculations, that does not amount to abuse. I would not, however, like it to be thought that my right hon. friend and the Government are complacent about the operations of the scheme.
We have heard a great deal tonight about the necessity for inquiries into the scheme. The Public Accounts Committee examined the schemes for 1965–66. Notwithstanding that examination and the Committee's conclusions, my right hon. Friend agrees that she has an obligation, and that there is a necessity, to keep the operation of the scheme under continuous review. As the hon. Member for Paddington, South said, the C.B.I. is examining the workings of the scheme. I am sure that it will read with interest

many of the constructive suggestions which have been made tonight. Certainly, as we examine the scheme as part of our continued review, we will look with great interest at some of the more creative suggestions which have been made tonight.
Two things, however, should be said. I say them without wishing to prejudice the outcome of any review which we, the C.B.I. or anybody else might make. The first deals with a man who finds a job at once before he has been unemployed. Suppose that a man is given, say, a month's notice. He has no idea of his prospects at the time that notice is given. He has no idea of what the demand for his services in the community is likely to be before he is given notice.
That man registers at an employment exchange and gets a job. It is available to him within two or three weeks and he is able, although he has been genuinely redundant, with all the uncertainty that that implies, to start on the Monday after finishing his previous job on the Friday. Would it be right to expect him to lose his redundancy payment? He certainly loses benefits even it he goes straight into another job; he loses seniority and all that that implies in the last-in, first-out principle. He may be less well paid. He may have to make personal adjustments, such as changing his home and his children's school. If that sort of man is to be denied the benefits of redundancy payment, he will certainly be less willing to change his job despite the fact that moving from job A to job B did not include a period of positive unemployment.
The second situation is that of a man who does not have a new job ready for him when he is redundant, and cannot immediately be re-employed. Two questions arise about his position if he knows that he has to wait in idleness and unemployment for two or three months before he can benefit from the redundancy payment scheme. The first question is what he should do if he is offered a job within a few days of qualifying for redundancy payments. Secondly, do we hold back the payment until the two or three months has elapsed? To do that would be likely to produce all the industrial frictions, difficulties and problems that the scheme was intended to avoid.
I simply offer these as ideas, but as ideas which my right hon. Friend must bear in mind as she considers, as part of her continuous review, what form the scheme should take in future months and years.
I have been asked some specific questions which, I hope I can answer to the satisfaction of the House.

Mr. David Steel: Before the hon. Gentleman leaves—

Mr Hattersley: I have only five minutes. Although I am sure that the hon. Member has an important contribution to make, he has arrived to make it rather late in the debate and I am sure that he would expect me to try to answer the questions which I was asked earlier.
The first question asked by the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) was the cost of industrial tribunals. Industrial tribunals in general—that is, tribunals dealing with other matters besides redundancy payments—cost something like £350,000 a year. When, however, one considers that the redundancy payments scheme alone has had outgoings of £900,000 in one week, it will be understood that that is a small proportion of the cost, and a necessary one, to make sure that appeals can be properly managed.
I must also tell him that industrial tribunals have the right to disallow expenses if they believe them to be claimed frivolously or maliciously. Certainly, on occasions, they have the right to impose the costs of one party on another. Therefore, his hypothetical man on a free trip

between London and Thurso will have to buy his own railway ticket.

Secondly, I was asked about bankruptcies which might result from the imposition of this levy. I am sorry that the right hon. Member for Mitcham (Mr. R. Carr) thought that I had been less than regretful about the additional costs that this imposes on industry. In my original speech I specified my regret in having to ask industry to make this additional payment. At this time when we hope for a reduction in industrial costs it is obviously a matter of regret to me and to the Government that it is necessary.

As I said then, and as I say again, although the increase is a matter of regret there are substantial benefits which we believe can be obtained from the scheme. They are benefits in terms of industrial peace, they are benefits in terms of the greater efficiency which stems from that industrial peace, not only for firms immediately involved but for firms on which they are dependent for spare parts and components, and firms which cannot operate without other firms which are themselves subject to strikes and stoppages.

We believe that this scheme will work partly because of self-interests and partly because it is an economic necessity and makes a contribution to the economic health of the nation. While we regret the increase in costs, it is obviously necessary if the scheme is to continue, and I am gratified to know that the House in its entirety believes that it is necessary and should continue, and that it does not intend to oppose either of these Orders.

Question put:—

The House divided: Ayes 189, Noes 7.

Division No. 285.]
AYES
[9.58 p.m.


Alldritt, Walter
Boardman, H. (Leigh)
Davidson, Arthur (Accrington)


Allen, Scholefield
Booth, Albert
Davies, Ednyfed Hudson (Conway)


Anderson, Donald
Boston, Terence
Davies, G. Elfed (Rhondda, E.)


Archer, Peter
Bottomley, Rt. Hn. Arthur
Davies, Dr. Ernest (Stretford)


Armstrong, Ernest
Boyden, James
Davies, Harold (Leek)


Atkins, Ronald (Preston, N.)
Braddock, Mrs. E. M.
Davies, S. O. (Merthyr)


Atkinson, Norman (Tottenham)
Bray, Dr. Jeremy
Dempsey, James


Bagier, Gordon A. T.
Brooks, Edwin
Diamond, Rt. Hn. John


Barnett, Joel
Brown, Bob (N'c'tle-upon-Tyne, W.)
Dobson, Ray


Baxter, William
Brown, R. W. (Shoreditch &amp; F'bury)
Doig, Peter


Beaney, Alan
Buchan, Norman
Driberg, Tom


Bence, Cyril
Butler, Herbert (Hackney, C.)
Dunnett, Jack


Benn, Rt. Hn. Anthony Wedgwood
Carmichael, Neil
Eadie, Alex


Bidwell, Sydney
Carter-Jones, Lewis
Edwards, William (Merioneth)


Binns, John
Coe, Denis
Ellis, John


Bishop, E. S.
Coleman, Donald
Ensor, David


Blackburn, F.
Cullen, Mrs. Alice
Evans, loan L. (Birm'h'm, Yardley)


Blenkinsop, Arthur
Dalyell, Tarn
Faulds, Andrew




Fernyhough, E.
Lawson, George
Pavitt, Laurence


Fitch, Alan (Wigan)
Leadbitter, Ted
Pearson, Arthur (Pontypridd)


Fletcher, Ted (Darlington)
Ledger, Ron
Pentland, Norman


Foot, Michael (Ebbw Vale)
Lee, Rt. Hn. Frederick(Newton)
Price, Thomas (Westhoughton)


Ford, Ben
Lee, John (Reading)
Probert, Arthur


Forrester, John
Lestor, Miss Joan
Rees, Merlyn


Fowler, Gerry
Lewis, Arthur (W. Ham, N.)
Robinson, W. O. J. (Walth'stow, E.)


Fraser, John (Norwood)
Lomas, Kenneth
Rodgers, William (Stockton)


Freeson, Reginald
Loughlin, Charles
Ross, Rt. Hn. William


Galpern, Sir Myer
Luard, Evan
Shaw, Arnold (Ilford, S.)


Cray, Dr. Hugh (Yarmouth)
Lyon, Alexander W. (York)
Sheldon, Robert


Gregory, Arnold
McBride, Neil
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)


Grey, Charles (Durham)
McCann, John
Silkin, Rt. Hn. John (Deptford)


Griffiths, David (Rother Valley)
Macdonald, A. H.
Silkin, Hn. S. C. (Dulwich)


Griffiths, Eddie (Brightside)
McGuire, Michael
Silverman, Julius


Griffiths, Rt. Hn. James (Llanelly)
Mackenzie, Gregor (Rutherglen)
Slater, Joseph


Hamilton, James (Bothwell)
Mackie, John
Small, William


Hannan, William
Mackintosh, John P.
Snow, Julian


Harper, Joseph
Maclennan, Robert
Spriggs, Leslie


Harrison, Walter (Wakefield)
McNamara, J. Kevin
Steele, Thomas (Dunbartonshire, W.)


Hattersley, Roy
Mahon, Peter (Preston, S.)
Summerskill, Hn. Dr. Shirley


Hazell, Bert
Mallalieu, J.P.W.(Huddersfield, E.)
Swain, Thomas


Heffer, Eric S.
Manuel, Archie
Swingler, Stephen


Henig, Stanley
Marks, Kenneth
Symonds, J. B.


Herbison, Rt. Hn. Margaret
Mason, Rt. Hn. Roy
Taverne, Dick


Hilton, W. S.
Mellish, Rt. Hn. Robert
Thomson, Rt. Hn. George


Hooley, Frank
Mendelson, J. J.
Thornton, Ernest


Houghton, Rt. Hn. Douglas
Millan, Bruce
Urwin, T. W.


Howarth, Robert (Bolton, E.)
Milne, Edward (Blyth)
Varley, Eric G.


Howell, Denis (Small Heath)
Mitchell, R. C. (S'th'pton, Test)
Wainwright, Edwin (Dearne Valley)


Howie, W.
Molloy, William



Hoy, James
Morgan, Elystan (Cardiganshire)
Walker, Harold (Doncaster)


Huckfield, Leslie
Morris, Charles R. (Openshaw)
Watkins, David (Consett)


Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, John (Aberavon)
White, Mrs. Eirene


Hunter, Adam
Murray, Albert
Wilkins, W. A.


Irvine, Sir Arthur (Edge Hill)
Newens, Stan
Willey, Rt. Hn. Frederick


Jackson, Colin (B'h'se &amp; Spenb'gh)
Norwood, Christopher
Williams, Clifford (Abertillery)


Jay, Rt. Hn. Douglas
Ogden, Eric
Williams, Mrs. Shirley (Hitchin)


Jeger, Mrs.Lena(H'b'n&amp;St.P'cras,S.)
O'Malley, Brian
Willis, Rt. Hn. George


Johnson, Carol (Lewisham, S.)
Oram, Albert E.
Winnick, David


Johnson, James (K'ston-on-Hull, W.)
Orbach, Maurice
Woodburn, Rt. Hn. A.


Jones, Dan (Burnley)
Oswald, Thomas
Yates, Victor


Jones, J. Idwal (Wrexham)
Owen, Dr. David (Plymouth, S'tn)



Judd, Frank
Page, Derek (King's Lynn)
TELLERS FOR THE AYES:


Kenyon, Clifford
Palmer, Arthur
Mr. J. D. Concannon and


Kerr, Dr. David (W'worth, Central)
Park, Trevor
Mr. Ernest G. Perry.


Kerr, Russell (Feltham)
Parkyn, Brian (Bedford)





NOES


Bessell, Peter
Thorpe, Rt. Hn. Jeremy



Grimond, Rt. Hn. J.
Wainwright, Richard (Colne Valley)
TELLERS FOR THE NOES:


Lubbock, Eric
Winstanley, Dr. M. P.
Mr. John Pardoe and


Mackenzie, Alasdair(Ross&amp;Crom'ty)

Mr. David Steel.

Orders of the Day — CIVIL AND DEFENCE VOTES

It being after Ten o'clock Mr. SPEAKER then proceeded, pursuant to paragraphs (8) and (9) of Standing Order No. 18 (Business of Supply), to put forthwith the Question, That the total amount of the Votes outstanding for the year 1968–69 be granted out of the Consolidated Fund for the services defined in those Votes.

Orders of the Day — CIVIL AND DEFENCE ESTIMATES, 1968–69 (OUTSTANDING VOTES)

Question,
That a sum not exceeding £6,735,187,850 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Civil and Defence Services for the year ending on the 31st day of March 1969,

put and agreed to.

Mr. SPEAKERthen proceeded, pursuant to paragraph (8) of Standing Order No. 18 (Business of Supply), to put severally the Questions on Motions relating to Navy, Army and Air Services Expenditure.

Orders of the Day — NAVY EXPENDITURE, 1966–67

Question,
That sanction be given to the application of the sum of £2,496,468 11s. 11d. out of surpluses arising out of certain Votes for Navy Services for the year ended 31st March 1967 to defray expenditure in excess of that appropriated to certain other Votes for those Services and to meet deficits in receipts not offset by savings in expenditure from the respective Votes as set out in and temporarily authorised in the Treasury Minute of 5th February 1968 (H.C. 112) and reported upon by the Committee of Public Accounts in their Second Report (H.C. 233),

put and agreed to.

Orders of the Day — ARMY EXPENDITURE, 1966–67

Question,
That sanction be given to the application of the sum of £1,425,485 8s. 2d. out of surpluses arising out of certain Votes for Army Services for the year ended 31st March 1967 to defray expenditure in excess of that appropriated to certain other Votes for those Services and to meet deficits in receipts not offset by savings in expenditure from the respective Votes as set out in and temporarily authorised in the Treasury Minute of 31st January 1968 (H.C. 111) and reported upon by the Committee of Public Accounts in their Second Report (H.C. 233),

put and agreed to.

Orders of the Day — AIR SERVICES EXPENDITURE, 1966–67

Question,
That sanction be given to the application of the sum of £3,530,033 16s. 4d. out of surpluses arising out of certain Votes for Air Services for the year ended 31st March 1967 to defray expenditure in excess of that appropriated to certain other Votes for those Services and to meet deficits in receipts not offset by savings in expenditure from the respective Votes as set out in and temporarily authorised in the Treasury Minute of 30th January 1968 (H.C. 108) and reported upon by the Committee of Public Accounts in their Second Report (H.C. 233),

put and agreed to.

Bill ordered to be brought in upon the Resolution relating to Civil and Defence Estimates by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Harold Lever, and Mr. Dick Taverne.

Orders of the Day — CONSOLIDATED FUND (APPROPRIATION)

Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March, 1969, and to appropriate the supplies granted in this Session of Parliament, presented accordingly and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 196.]

Orders of the Day — MEAT AND LIVESTOCK COMMISSION (LEVY)

Order read for resuming adjourned debate on Question [17th July].
That the Meat and Livestock Commission Levy Scheme (Confirmation) Order 1968, a draft of which was laid before this House on 2nd July, be approved.—[Mr. Cledwyn Hughes.]

Question again proposed.

10.10 p.m.

Mr. Peter Mills: Whatever may be said about this scheme, or about the Meat and Livestock Commission, the problem which looms up in my mind is the difficult climate into which the scheme finds itself launched. Many farmers and those engaged in the slaughtering of animals and the retailing of meat are hostile to the whole set-up of the scheme. The Minister must take into account the climate and the reaction and seek to answer the doubts which many have before proceeding with the scheme. Unless the Minister does something about the climate as a matter of urgency, the scheme will fail.
People are concerned about the growth in the number of bodies that are being set up and in the number of levy schemes. This was the reaction from both sides of the House during the previous debate on this subject, and there has been the most frantic lobbying by certain sections of the business community. In a sense I can understand this.
I suggest that the most stringent economies must be applied. The administration costs of the scheme must be kept to the minimum. We must beware of putting aside such schemes and rejecting this scheme out of hand, for I am not prepared to return to the jungle of the free-for-all that existed before the war. Many hon. Members will remember the difficulties of the farming community in the past, and I am not prepared to abandon these schemes completely.
I ask the Minister to impress upon the Meat and Livestock Commission the need to keep the levies as low as possible. It is right too that each year the Commission should come to the House to ask for an increase should this be necessary, and that there should be a full

debate on the subject. I am not prepared to give themcarte blanche so that they can go ahead. The Minister must do everything in his power to keep down the cost of administration so that the levies do not rise. He must make an effort to come to terms with the fears of those who are objecting to the scheme.
Without the co-operation of all sides in the industry, the scheme will fail. The Minister should demonstrate quite clearly the advantages of the scheme; and that it will be worth while to support it by means of the levies. I suggest that a baby born like this, so soon after the violent reaction we have had to the Agricultural Training Board, is not a very good omen for the Commission: in the long run, no confidence means no success.
One of the most glaring omissions is the fact that these levies will not be made on imported meat. This is a very serious matter and—

Mr. Speaker: Order. We are now discussing an Order. The hon. Member knows that he cannot amend it. He can denounce it, but he cannot amend it.

Mr. Mills: Then I denounce it. This is a very serious mistake, and the Minister should seriously consider seeking powers to make imported meat pay the levy as well—

Mr. Speaker: Order. Perhaps the hon. Gentleman does not understand. He can denounce but he cannot amend. He is now seeking to amend.

Mr. Mills: Then I had better leave that subject. I have made my point to the Minister.

Mr. R. J. Maxwell-Hyslop: Would not the answer be for the Minister to withdraw this Order and then introduce an Order in the form my hon. Friend recommends?

Mr. Speaker: Order. The hon. Gentleman can conduct his own campaign.

Mr. Mills: For my part, Mr. Speaker, that would be perfectly in order for me, but whether you would consider it so is an entirely different matter.
We have had many letters on this question of the levy from butchers and those


who operate slaughterhouses, but I suggest that those who criticise must at least give us an alternative, and that is not so easy. I suggest that the levies would be considerably greater if they were not taken at this point; and that the slaughterhouse men and others who are killing those animals must seek to recoup the levies from the farmer and from the retailer. Otherwise, if we have these collection points from all the three parties concerned the levies will grow very considerably, and that would be wrong.
In considering how the levies will be spent I accept the necessity for research. There is the taking over of P.I.D.A. and the beef recording body and the sums of money going into research, but private enterprise research works on a profit motive which would quickly bring down the chopper on a scheme that was proving unsuccessful. I trust that these levies will not be wasted on too costly and too extended schemes of research. My particular criticism of P.I.D.A. is that it has taken far too long with its research schemes. I hope that the Commission will not take such a leisurely course, but will spend these moneys wisely.
I trust that there will be no duplication of advice and research. It will be obviously a waste of the levies if the N.A.A.S. continues to do the same work that the Commission is to do. Many people fear that unless action is taken to avoid it, there will be a vast amount of duplication of research with the consequent wasting of the moneys of the farmers, the butchers and all those who contribute. This is an important point.
Paragraph 4(2)(d) of the Schedule refers to a levy of 2s. for pigs. This is fairly high. I must declare an interest as I rear pigs. If I can make 10s. or 12s. profit on a pig I consider that I am doing fairly well. I have never been very good at mathematics, but I should have thought that the 2s. levy is a fifth of my profit. That is a serious inroad into the profit on the production of pig-meat. The Minister should look carefully at the Schedule again. Although 6s. may not be too high a levy for beef the levy for pigs is certainly high. Paragraph 5(5) says that there is no appeal. That seems disastrous. Surely in the case

of dispute one ought to be able to appeal to the Ministry and to have a fair hearing. This point should be cleared up.
I hope that the Minister will try to alter this most unfavourable climate into which it is sought to launch the Commission. I hope that the money will be spent wisely and sensibly. Consultation is absolutely vital to the success of the scheme. I have already heard from some bodies outside that there has been lack of consultation. I hope that there will be no duplication of research. The Minister must think again about the problems of imported meat.
The Commission and these levies start in a very difficult climate. If we want this scheme to be successful a considerable amount of pruning will have to be done in administration costs. I am not prepared to dismiss the scheme. Farmers and those concerned in the industry will willingly pay these levies if they see that they will do something for the industry, the trade and the consumer. I hope that the Minister will be able to answer some of the fears which I and people outside have, but I hope that the scheme will be a success.

Mr. Speaker: May I advise the House that it will not be out of order to refer to the Order that we are discussing.

10.24 p.m.

Mr. Stanley Orme: I met representatives of the wholesale meat salesmen's association in my area last weekend. I am completely in favour of a Meat and Livestock Commission. It is absolutely necessary. It will protect the consumer by ensuring that labelling of meat is clear and definite. I make no bones about that particular point. [An HON. MEMBER: "That makes a very meaty subject."] As one of my hon. Friends says, "That makes a very meaty subject".
I have two questions to ask my right hon. Friend the Minister, and I am sure that he will be prepared to answer them. First, why has the primary producer been excluded from the levy? Many people believe that the producer, namely, the farmer, should bear some of the burden and that it should not be left purely to the market forces to see that the cost is evenly distributed.
Secondly, may I ask my right hon. Friend why imported cattle are excluded.

Mr. Speaker: It is all right for the hon. Gentleman to ask the question, but the Minister could not answer it and be in order.

Mr. Orme: I appreciate the point, Sir. We are dealing with a levy on beef.

Mr. Speaker: Order. The parent Act sets up the Commission. The Order imposes a levy. We are talking about a levy.

Mr. Orme: I am talking about a levy on beef, and I am asking why imported beef is excluded. Those are my two questions.

10.26 p.m.

Sir Frank Pearson: I thank the Minister for having adjourned the debate last Thursday, thus giving us all a chance to speak now and, even more important, to read the speech he made then. Having read it with the greatest care, I am now much more doubtful about the Order than I was before he made his speech.
The Minister started his speech by saying that as a matter of principle both sides were more or less agreed. Then he referred to the proceedings in Committee on the Agriculture Act. This is so, but the right hon. Gentleman underestimates the serious reservations that many of us had in Committee on certain points. We are very suspicious about the wideness of the powers being granted to the Commission. We were especially worried because we felt that the committees set up under the scheme may not be able to perform their function.
The fact that we are debating the Order tonight, and that there is so much hostility to the Order, shows beyond all doubt that the committees have failed. There has been a lack of communication somewhere. If the scheme is to be successful, something must be amended to ensure that the channels of communication work better in the future than they have up to this time.
I shall not dwell on the criticisms of the Order which have been made by hon. Members on both sides. It all comes dawn to criticism of pinning the levy to the point of slaughter. Because of that, imported beef escapes the levy.

This is totally wrong. If this is to be a permanent feature of the scheme, it will not be a success. The Minister must think again and introduce something totally different.
Schedule 1 to the Act outlines the responsibilities of the Commission. They cover a multitude of subjects, only one or two of which have anything to do with retail meat. The rest concern such matters as artificial insemination and a hundred and one different things concerned with the production of meat. It is, therefore totally illogical that the whole levy should fall on one section.
When the Minister explained the scheme to us he pointed out that no less than three-quarters of the expenditure from the levy would be allocated to the pig development scheme. This is extraordinary. We debated the Meat and Livestock Commission for about six or seven days in Committee and covered the whole aspect of meat production and retailing. Then the Minister comes along with an Order for a levy three-quarters of the expenditure for which is to deal with pigs, for which we have had a development scheme for years. The pig meat industry is one of the most coherent parts of the meat trade, and the levy could have been placed on it to raise the money to deal with pig development. That is where the money should have come from.
What is the remaining quarter of the levy to be spent on? I think that the Minister said that it was to be spent on evaluation in the interests of producing meat most suited to the requirements of the housewife. It is a lot of "boloney" if that is all he is to use that £500,000 for. I should like to think that the housewife knows good meat when she sees it. I am very doubtful whether she needs this great Commission, with all its committees, levies, forms and records to tell when meat is good and when it is not. We have the finest meat trade in the world, gentlemen, and we produce the finest meat in the world. Our butchers know more about meat than anybody else does.

Mr. Speaker: Order. Mr. Speaker is a patriot, too, but we must come to the Order.

Sir Frank Pearson: I entirely accept your Ruling, Mr. Speaker.

Mr. Robert Maclennan: On a point of order, Mr. Speaker. When the hon. Gentleman turns his back on the House and addresses his hon. Friends as "gentlemen" he denies hon. Members on this side of the House the opportunity to hear what he is saying.

Mr. Speaker: The hon. Member for Caithness and Sutherland (Mr. Maclennan), at this hour of the day, is a little hypersensitive.

Sir Frank Pearson: It would be a matter of great grief to me if I felt that hon. Gentlemen opposite had not heard what I said, because they would have missed something. But I feel that I was getting a little wide of the Order.
One part of the Order rather concerns me, because it illustrates how easy it is for bureaucracy to take control. With the best will in the world we may be trying to improve the standard of the meat the housewife gets, and wishing the scheme to be a success, but I draw attention to paragraph 7 of the Schedule, which lays down all the records that must be kept by those who slaughter cattle and sheep. That may not be a great burden for a big slaughterhouse or local authority slaughterhouse, but it is a burden for the small family butcher who slaughters his own meat.
It is a great pity that that type of slaughterer-retailer should be asked to keep all the very intricate records and then should be open to visits from inspectors who check the records for two years past. This is the sort of thing that makes the trading life of a small trader intolerable.

Mr. Paul Hawkins: My hon. Friend may remember that in Committee the Government made it quite clear that it was their intention to do away with small slaughterhouses and retail butchers.

Sir Frank Pearson: My hon. Friend is quite right. This is what we all suspect. We look at these schemes, with all their intricate administrative provisions, and think that the Government are hostile to the small man. They know that, once this scheme gets going, in the end the small man will say, "I cannot carry on in business" and will leave it. This is why I dislike these schemes so intensely and the bureaucratic control laid upon

the small trader. But I shall not labour the point. I am certain that many of my hon. Friends will make it.

Mr. J. T. Price: I hope the hon. Gentleman will not mind if I remind him of the Slaughterhouses Act, which was passed by Parliament under Conservative direction. The central purpose of that Act was to concentrate slaughtering of animals in this country. It was supported by all parties, but was placed on the Statute Book by a Tory Government.

Sir Frank Pearson: rose—

Mr. Speaker: Order. I hope the hon. Member for Clitheroe (Sir Frank Pearson) will not yield to temptation but that he will return to the Order.

Sir Frank Pearson: I shall not be turned aside from debating the Order, Mr. Speaker, by the irrelevant remarks of the hon. Member for Westhoughton (Mr. J. T. Price).
I return to the point I made earlier. If this scheme is to be successful, the committees will have to work a good deal more intelligently than they have up to now. They must work in the closest collaboration with the trade. I hope never again to see such an Order under the Act which encounters so much hostility in the House. If the Commission does not manage to achieve that collaboration, then it is the Commission that will have to go.

10.37 p.m.

Mr. Richard Body: There is only one promising feature of the Meat and Livestock Commission. This is the appointment of Sir Rex Cohen as Chairman. He brings to the Commission great experience of both marketing and livestock. However, there must be real misgiving about the staffing of the Commission.
Each region is to have a director. Under each regional director there are to be specialists for beef, pigs and sheep, and under the regional director there will also be fieldsmen who will visit every farm in the land. Most of these officials will be recruited from P.I.D.A. and the Beef Recording Association. It is significant to look at the salary scale. The fieldsmen are paid £1,100, rising to £1,700, and the regional directors at


£1,700, rising to £2,300. The Commission will have to pay far higher salaries than that if it is to attract the kind of man whose advice will be respected by the farmer.
It cannot be said that these inadequate salaries are the result of shortage of funds. The Commission follows P.I.D.A., and from those who produce pigs £6,675,000 has been extracted in 10 years. My hon. Friend the Member for Torrington (Mr. Peter Mills) and I, and the other pig producers, have paid £850,000 in one year alone. Much of this huge sum—

Mr. Speaker: Order. The salaries of the Commission and the amount the hon. Gentleman has himself contributed, apart from the slaughterer's levy, are out of order.

. Mr. Body: I hope that the Commission will not repeat the same mistakes as the P.I.D.A. and duplicate its efforts. This has been done on a considerable scale. What is the point of the Meat and Livestock Commission having fieldsmen going to every farm and, at the same time, the N.A.A.S. sending livestock advisory officers to the same farms? It is the view of many farmers that the advice of neither will match the advice which they can now get from their own veterinary surgeons, or from the Fatstock Marketing Corporation and other technical sales representatives.
The same goes for research. The M.L.C. plans to spend a quarter of its income on research. If this research is done on the same lines as that done by P.I.D.A., we can be sure that the Commission will dabble in work which others have been able to do more efficiently. For 10 years the emphasis has been put by P.I.D.A. on the bacon pig and this research is now to be continued by the Commission. Yet, despite 10 years of research, we still do not fulfil our bacon quota and the bacon pig is only marginally better than it was when P.I.D.A. began. Almost all the improvements which have been made so far can be attributed to individual breeders and the large-scale breeding companies and companies like Walls and B.O.C.M. All the while P.I.D.A. has overlooked the importance to the butcher and the housewife of the pork pig.
P.I.D.A. has definitely not given the farmer his money's worth and now the butcher is to be fleeced of an even greater sum. The butcher can be sure that he will not get his money's worth out of the Commission any more than the farmer got his money's worth out of P.I.D.A. The best argument for this scheme is that it will mean the demise of P.I.D.A. I hope that it will also mean the demise of many of the ideas of P.I.D.A.

10.43 p.m.

Mr. James Johnson: I enter this "National Farmers' Union" meeting with some trepidation, as I am not even a pig farmer, unlike some hon. Members opposite. I believe that tonight the Opposition would like the House to buy a pig in a poke. I am moved to speak in the debate because of the tirade from hon. Members opposite in the debate on Wednesday night, particularly the contribution which was made around midnight by the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport), who was most hostile towards the Government.
Much of the sound and fury from hon. Members opposite signifies but little. Like other hon. Members, I have met butchers who have made their feelings known to me. They have a case and the Opposition have stated it very well tonight, but what substance is there in this case? To what extent are the butchers being victimised and persecuted? Is the levy such an iniquitous cost increase to the industry?
The hon. and gallant Member for Knutsford waxed at his most eloquent about this. Like many others, he told me that the levy was one among many cost increases being imposed by this "vicious, wicked" Socialist Government on industry. I do not believe it. It is my belief, and I think that my right hon. Friend shares my view, that the levy will be diffused over the whole of the meat and livestock industry and will not be concentrated on the point of slaughter.
I do not intend to get involved with a very clever dialectician on my own side of the House, but last week my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) talked about market forces. He does not believe in market forces.


He is a good Socialist. I am a good Socialist and I do not believe in market forces.

Mr. Speaker: Order, we can leave market porters out of this.

Mr. Johnson: I will not pursue this, Sir.

Mr. Speaker: I apologise. The amplification is defective. I understand that the hon. Gentleman said "market slaughterers".

Mr. Johnson: I feel a lot better after that.
I want to refute the nonsense talked on the benches opposite with some facts. If the whole cost of this levy, I believe it to be £1.85 million, were passed on to the consumer, and I have had these figures checked with the highest authority, it would mean an increase of one-seventh per lb. on retail butchers' sales. This is said to be iniquitous, wrecking the whole industry, causing unemployment and destitution to butchers and their families.
This is what was said last Wednesday. [AN HON. MEMBER: "Who said that?"] The hon. and gallant Member for Knutsford. He often says what the other side feels, but does not say. The levy is not merely on the butcher, not a mere addition to the costs of the industry, but, as an hon. Member said last week, a collective investment in its efficiency. It is hoped that the industry will respond and help the Commission in its work and apply the results of that work quickly.
My hon. Friend the Member for Salford, West (Mr. Orme) spoke about labelling and the way in which this work will help his wife, and all our wives, to shop more efficiently and get better value for money. This is an important issue which has been completely lost in the sectional, emotional appeal from Members speaking for the National Farmers' Union, on behalf of their friends. It is not in the best traditions of the House to lobby in this way. I speak on behalf of the whole industry, and on behalf of all the women in the country.
Those who read last week's proceedings will see that the right hon. Member for Grantham (Mr. Godber) the Opposition official spokesman, has never

opposed the Commission, or the fact that the Government must get the money by levy to operate it. The most convenient way of getting the levy is at the point of slaughter. That is indubitable and the arguments of the Opposition have not convinced me. Once again, I say that it has bought a magnificent pig in a poke.

Mr. J. B. Godber: The hon. Gentleman has quoted me, and I do not dispute anything that he has quoted. Would he explain why he has not supported me in regard to a levy on imported meat, because the very things about which he was talking surely make it right to impose it on imported meat, too?

Mr. Johnson: The Minister is better able to deal with these points. The importer gains little by the levy. It is the home producer who gains in the home sector, as well as the population of the country—our wives. Those who gain should contribute to the cost of the levy.

10.50 p.m.

Mrs. Jill Knight: I am often infused with resentment when hon. Gentlemen presume to speak on behalf of my sex. I strongly resent the implication that the housewife who does the family shopping is a bird-brained nitwit who does not know the difference between a chop and scrag end.
Having listened to the debate, and read as much as I could about the previous one, I gather that it is seriously suggested that the slaughterhouse operator must pay the levy partly so that the meat can be labelled clearly, so that the housewife will not be misled by the butcher about the quality of the meat. Whereas the large majority of housewives know perfectly well about the quality of the meat that they are buying, the housewives who have not yet learned to do so have ready advisers in their butchers. [An HON. MEMBER: "And their husbands."] Their husbands may well come into it at a later stage, but when the transaction is being carried through, the butcher, who knows well the quality of the meat, is ready to advise. This is a libel both on the housewife and on the butcher.
We housewives were told some years ago that we did not have enough sense to know about eggs, and so we had the


great egg farce. Now, the Egg Marketing Board has been unscrambled, as it were—

Mr. Speaker: Order. I intervene with trepidation, but I must point out that we are discussing a levy on slaughtering.

Mrs. Knight: I apologise, Mr. Speaker. I was merely drawing what seemed to me to be a reasonable point of difference and similarity between the two cases. I feel strongly that when money is being collected for doing a job of this kind, one should consider whether the job is necessary at all.

Mr. Cranley Onslow: Is my hon. Friend aware that part of the labelling which is proposed is categorisation of cookability and eatability? Would she agree that the cookability in meat depends upon the excellence of the cook as much as on anything else, and that eatability depends on factors like the state of one's teeth? These factors are hardly under the control of the Commission.

Mrs. Knight: My hon. Friend has made a splendid intervention. The numerous factors go far beyond what it is possible to specify on a label attached to a piece of meat.
When trying to impose a levy scheme of this kind, the Government should make sure that they have the full co-operation, agreement and understanding of the people involved. I understand that the National Federation of Meat Traders' Associations feels strongly that its members have not had a fair deal and that the fairness of the levy is very much in question, although the Government promised time and again that when the levy was imposed it would be a fair one. I understand that the Federation feels strongly that it is not a fair levy.
Anyone who proposes to work a scheme of this nature cannot attempt to operate it successfully without the co-operation of the very people on whom the scheme depends.

10.55 p.m.

Mr. Bert Hazell: I shall not keep the House more than two or three minutes, but there are one or two points I should like to make about the proposed levy. I was very interested to hear the hon. Member for Torrington (Mr. Peter Mills) say that he agreed in

principle with the Meat and Livestock Commission and that he did not want to see a return to the difficult marketing conditions which used to exist in the industry a few years ago, but he was anxious that the levy should be kept to the lowest possible amount.
I think that my right hon. Friend, in bringing to the House the figure of £1·85 million, has endeavoured to keep the figure as low as practicably possible. I am certain that had the Commission had its way the figure the House would have been considering tonight would have been substantially in excess of £1·85 million. Therefore, I think that the Minister must have brought some pressure to bear to ensure that the amount to be demanded is as low as possible while being in keeping with the obligations and responsibilities of the Commission.

Mr. Harold Gurden: How long, can the hon. Gentleman tell us, will this figure remain at £1·85 million?

Mr. Hazell: We are dealing with the levy as it is presented to the House at the moment and I do not intend to be drawn into any projected figure or date in the future. This figure the House is being asked to approve will last for two years, and after that it will be for the House to decide whether the amount should be increased or not, according to the recommendations of the Minister at that time and the observations of the Commission.
We are assured that three-quarters of this sum is already a liability on the Commission itself, that it is taking over responsibilities of other organisations. We know that £1 million is required already for the continuation of the work which the Pig Industry Development Authority has done and is doing. I think that farmers generally would agree with me in saying that everyone associated with the industry desires that the work of P.I.D.A. should progress and that there should not be any reduction in it, because it is of help to the pig industry as a whole.
Some of the money is required for the work of meat recording, the expenses in connection with the development of meat recording, carcase classification, market information, and so on. Therefore, I


must stress that we on this side of the House think that the amount called for is not unreasonable, bearing in mind the continuing responsibilities which the Commission will have to accept, and the work of development to be undertaken in the immediate future.

10.59 p.m.

Mr. Paul Hawkins: Perhaps I should at the beginning declare an interest, as I am a livestock auctioneer. This declaration may be tedious repetition, because I have made it on previous occasions.
The levy is the result of setting up the Commission, about which I have always had considerable reservations. I have stifled them because I thought the industry wanted it and I thought that it might possibly do some good.
In Committee on the Agriculture Bill, as the Bill progressed, I had more and more misgivings about the objects for which the levy is being demanded. Time and time again I said, and the former Minister agreed, that the Bill must have the good will of all concerned if it was to work properly. Yet the drastic compulsory powers in Clause 9 were insisted upon, and that is our major objection to the Act—

Mr. Speaker: Order. The hon. Gentleman knows that we cannot amend the Act or the parent Section, of which the Order is an application. He must come to the Order.

Sir Douglas Glover: On a point of order. Are we not in order in saying that one of the reasons why we object to the Order is that it will be used for certain things which are in the Act? I would have thought that they were relevant.

Mr. Speaker: I am grateful to the hon. Member for advising the Chair of what is in order; I have, however, just ruled.

Mr. Hawkins: I regret being out of order, Mr. Speaker. I was simply trying to point out that one of the purposes of the Order is to introduce compulsory powers in certain instances.
I believed, in my innocence, that no Government would insist on a levy which would be used to put traders and butchers

out of business and to prevent fresh enterprises from even opening in development areas. I understood that such vital matters as prevention of disease and control of imports could be tackled with this money. The Minister agreed that disease was an important subject and that the Commission would probably be able to deal with this. But it is not one of the objectives in the "Work and Income" booklet produced by the Commission, which says how the money will be spent.
The Commission gains its power from this levy, which enables it to close markets, butchers' shops and slaughterhouses. The Minister said that it was the Government's policy that smaller slaughterhouses should be closed, and the levy will make this possible. Is it any wonder that the trades have risen against this? The Opposition fought hard against these compulsory powers, but the chairman says, in this booklet:
I should also make it clear that the scheme has not been agreed by many of the interests concerned despite weeks of consultation.
I cannot think of any interests which are likely to have agreed it. Possibly the importers did, because they do not have to pay any levy; I should be interested to hear which interests have agreed it. Surely many more would have been preferable to beginning the scheme with no good will at all. I am now convinced that it will be more of a burden than a help.
My hon. Friend the Member for Torrington (Mr. Peter Mills) referred to the climate of opinion in the industry and the country. As a result of these levies and boards which have been imposed on agriculture, the industry has changed remarkably over the last five to seven years. Anyone who goes about the country will have realised that there has been a revulsion of feeling against the interference with private businesses and individuals which these schemes and their levies have wrought upon the population. I hope that my Front Bench—if not the Government, who are completely out of touch with public opinion—will realise this and will not consider themselves bound by former attitudes. The climate has changed in agriculture because we are plagued with these bodies and their levies. We have an enormous number and variety of them.

Mr. Speaker: Order. We are not discussing the hon. Gentleman's Front Bench or various levies. We are discussing the levy to which the Order refers.

Mr. Hawkins: I apologise, Mr. Speaker. I will not, therefore, refer to the Potato Board, which I was about to do.
I do not suggest that the chairman of this new board has adopted the sort of dictatorial attitude that has been adopted by a recent board which has been imposed on the agriculture industry. The first move of the Meat and Livestock Commission was to seek levies at double the rate the Commission thought necessary. I was glad to see that the Minister had reduced the top limits for levy purposes—for example, from 8s. to 6s. for cattle—but I had hoped that for once the right hon. Gentleman would have instructed the Commission to review the whole position again and would have said, "You will make do with half the figure for which you have asked." That is the attitude which the right hon. Gentleman should have adopted, at least for the first few years of the Commission's existence, towards this body.
The levy will be used to achieve the work mentioned in the booklet to which I referred and many producers and butchers consider this work to be totally irrelevant. At the start the board will cost £1·8 million. But what will be the total annual cost to the industry of all the levies? If we could spend this and the proceeds of other levies to raise the end prices to the producers, the money would be put to far better use.
One objective of the scheme—and no doubt much of the levy money will go towards this end—is to co-ordinate the labelling of meat. I agree with my hon. Friends who have pointed out that excessive handling can damage the quality of meat. If a country butcher is asked to cut off the best joint from a piece of meat that has been labelled, he must then handle the remainder of the joint, recut it and label it again. This constant handling of meat can do no good for the butcher or the consumer and it is bound to add to the cost.

Mr. Hazell: Is all meat priced at the top price? In other words, are there no cheaper cuts?

Mr. Speaker: Order. I suggest that the hon. Member for Norfolk, South-West (Mr. Hawkins) returns to the subject of the Order.

Mr. Hawkins: With respect, Mr. Speaker, the Order provides for amounts to be levied and sets out certain objectives on which the levy may be spent. Obviously, joints of meat are priced according to their quality. I was referring to the case of a housewife wanting a butcher to cut the best piece of meat from an already priced and labelled joint.

Mr. Speaker: Order. The hon. Gentleman cannot, in discussing this Order, refer in detail to the cutting up of meat, the selling of it and the pricing of various parts of it. We are discussing the levy for which the Order makes provision, and he must address his remarks to that.

Mr. Hawkins: I apologise again, Mr. Speaker. I thought that these matters were part of the objective of the scheme.
A compulsory scheme of this sort will be largely unworkable, the cost of the levy will rise and, in the end, costs to the consumer will rise. Apart from the £1 million which would have been spent anyway for P.I.D.A., £320,000, as set out in the booklet, is being spent on collecting the levy, on general headquarters expenses, approved expenditure and contingencies. I note that one of the contingencies would be the setting up of a new headquarters in Scotland. Such is the way that empires grow.
The farmers' unions and the butchers are right to object to this scheme. The National Farmers' Union journal of 1st June this year states:
In its discussions with the Commission, however, the union has repeatedly emphasised the vital need for it to convince the industry that its services "—
that is, the Commission's services—
will provide real value for money. This it has so far failed to do. And this is the nub of the matter.
The Commission's premature decision on the levy, presumably urged on by the Government, has produced a complete refusal by the butchers to co-operate. This is thoroughly bad for the whole meat industry and in particular for the consumer. Even at this late hour I urge hon. Members to reject the scheme so that further consultations can take place,


and, in particular, I ask the Government to consider the suggestion that the Commission's work, largely for the ultimate benefit of all consumers, should be financed during the first year or two as a public scheme. This would cut costs. I hope that the Government will recognise that any scheme is doomed to failure if it does not have the good will of the vast majority of those concerned, and that they should withdraw this Order and think again.

Several hon. Members: rose—

Mr. Speaker: Order. I remind hon. Members that this debate will finish at 11.41 p.m. Hon. Members should be fair to each other and make sure that all who wish to speak have a reasonable proportion of the time available.

11.12 p.m.

Mr. Albert Booth: While many matters may divide us in this House, I hope we can be at one in agreeing that it is regrettable that a situation should have arisen in which the work of the Meat and Livestock Commission is liable to meet with obstruction and non-co-operation from a body of men whose maximum co-operation is needed if it is to work effectively.
I was concerned to receive today from a butcher in my constituency a communication which indicated that the President of the National Federation of Meat Traders' Associations has invited butchers to consider a number of ways in which they might frustrate the work of the Commission, without stepping beyond the bounds of the law, to express their protest at what they consider to be the unfair method of obtaining this levy.
While in no way approving the action of the President of the National Federation of Meat Traders' Associations, I suggest to the Minister that it might be worth while considering whether or not an undertaking can be given that alternative ways of obtaining the money necessary to carry out the work of the Commission will be considered. It seems to be a reasonable and logical request, when one considers who will benefit from the work of the Commission. It cannot be argued that the slaughterer or the farmer or the retailer are the only people who will benefit.
One could argue possibly more logically that the customer, the housewife and the members of the housewife's family would benefit equally well from the work of the Commission, but one would not go on from that to suggest that the levy should be placed on the housewife, although one may feel that it will be automatically passed on to her. I am certain that it is not beyond the ability of my right hon. Friend to devise a scheme whereby the cost could be spread more widely across the industry, bearing partially upon the retailer, partially upon the slaughterer and partially upon the farmer, recognising that, almost inevitably, it will bear partially upon the housewife in any case. This would be worth while, since it would be a fair way to do it.

Mr. Speaker: The hon. Member cannot amend the Order.

Mr. Booth: In view of your Ruling, Sir, I take it that I must oppose the Order.
I oppose it, therefore, so that I may ask my right hon. Friend to consider a fairer way of introducing the levy with a view to obtaining the maximum cooperation which will be needed not only to operate the work of the Commission fairly, but to ensure that the consumers will reap the full benefits of the work of the Commission, as we hope they ultimately will.

11.16 p.m.

Mr. Michael Jopling: I am disappointed that during the course of the debate some of my hon. Friends have used the Order as a vehicle for attacking the Meat and Livestock Commission. If they have antagonisms to the Commission these should have been voiced some years ago, when the Verdon-Smith Report was first published. The Minister made a serious omission in not paying tribute to the Verdon-Smith Committee—I know that that is a dirty word to the Government—when he opened the debate. The attitude of some of my hon. Friends to the Meat and Livestock Commission has been soured by the experience of the Agricultural Training Board, which is a pity.
As an agriculturist, I believe that the levy which is to be imposed by the Commission will, in general, be useful to the


industry as a whole. The Commission has a useful job to do, and I hope that it will be allowed to get on with it, but I am antagonistic to the Order and I oppose it on three grounds which have already been mentioned.
I oppose it partly because the Order refers only to home-killed meat, and this is a serious omission. The Verdon-Smith Report, in paragraph 851, said that for imports a comparable levy should be charged at the ports. I do not see why this could not have been done. I believe that it could simply and economically be collected at that point.
Secondly, my main quarrel with the Order is that it gives the Commission an open cheque for several years before Parliament can review the work of the Meat and Livestock Commission. As the Minister said in opening the debate, the Commission has agreed not to increase the levy for two years, but there is another £600,000 that can be collected under the Order above the amount to be levied for the years ahead. It could, therefore, be four years before the House has an opportunity to debate the workings of the Commission. It seems to me that there has been a serious change in policy by the Government from what we understood in Committee. When we debated the levy at that time, the hon. Gentleman the Joint Parliamentary Secretary, the hon. Member for Edinburgh, Leith (Mr. Hoy) said:
Parliament will surely wish to take into account … this year's and next year's needs and circumstances, in the light of the way in which the Commission and the industry are using the powers provided in the Bill."— [OFFICIAL REPORT,Standing Committee A, 28th July, 1966; c. 454.]
The phrase used was "this year's and next year's". Therefore, our understanding was that we would have a levy that could be reviewed at the end of two years, but we now have a situation in which Parliament may not discuss the matter again for four years.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): The Meat and Livestock Commission has agreed that this agreement should only continue for two years. That is the period laid down. If the hon. Gentleman will divert himself to another point, it was I who insisted in Committee that every section

of the industry should be allowed to consider whether the levy ought to be imposed, and it was the hon. Gentleman and his right hon. Friends who opposed the Government in this respect, and insisted that the levy must be made at the carcase point.

Mr. Jopling: As I understand the position, the Commission has agreed that it will not increase the levy on cattle of 4s. a head for two years but as a result of the Order it could levy 6s. So, for two years, it can levy 4s., and then 6s., without coming to Parliament at all. We therefore have a clear case of the Government having altered their policy. I do not think that the Government can run away from this charge. They have not behaved fairly to the House, and I hope that because of this change of policy, of which we were not told earlier, we shall divide against the Order.

11.22 p.m.

Mr. Anthony Stodart: When the Minister adjourned consideration of the Order last week he said that he wanted to hear a full debate. I hope that he has now not only heard, but has listened to—as I am sure he has —a debate in which the main points made have been on the size of the levy, the method of its collection, and, although quite clearly I must tread very delicately here, the exclusion of imported meat.
I very much agree with the remarks of my right hon. Friend the Member for Ashford (Mr. Deedes) the other night, and with those of several hon. Members on both sides this evening. There are very strong feelings among producers that levies or contributions of this kind are getting money enough. That feeling may be unreasonable, but it certainly exists. I agree with my hon. Friends the Members for Torrington (Mr. Peter Mills) and Westmorland (Mr. Jopling) that this feeling has been stimulated, I think unfortunately, by the incredible hamfistedness of the handling of the Agricultural Training Board's affairs. After that experience of some months ago I think that the Government should have prepared the ground a little for this levy, but as far as I can see they have done very little indeed.
I say quite frankly that this Commission is desirable, by and large, provided that it works—and this is waving


the red rag—along the lines of P.I.D.A., because I think that P.I.D.A. has, on the whole, done good work which has been to the advantage not only of the producers but of the consumers by improving the quality of livestock and pigmeat. Therefore, I say that provided the Commission gets its priorities right and uses the levies to get an improved recorded production of the right types of carcases, and so on, and forgets about most of the nonsense in Section 9, I do not in principle quarrel with it.
Nor, if I may say so, do I quarrel, broadly speaking, with the principle of paying by levy. The Amendment we moved in Committee was suggested by the National Farmers' Union, which accepted the principle and was concerned only with the amount. It is most important that the method of collection should be done simply and efficiently. The Bill certainly gave powers to levy livestock products. I think it meant that a levy could be put on each pound of meat pie or sausages. To put the levy on small sales would be quite prohibitive.
I cannot see why, from the point of slaughter, the charge will not filter through back a little to producers and forward a little to consumers, through what I know the hon. Member for Ebbw Vale (Mr. Michael Foot) does not like, the ordinary play of market forces. This may have disadvantages, but I do not think that there is a simpler, more efficient or cheaper way of collecting the levy.
It is not in order to attempt to amend this Order and to ask that imported meat should be included, but I think I heard you say, Mr. Speaker, that it was within order to denounce the exclusion of imports. It is quite disgraceful that imports should not be included in the levy. I should think it—I use a denunciatory word—preposterous that imports should escape because this means that inevitably far more of the weight must fall on the home-produced article. The hon. Member for King's Lynn (Mr. Derek Page) reminded us of some of the proportions of imported meat as opposed to home-produced. Something like 34 per cent. of all the meat with which the Commission will deal is imported. It is deplorable that importers will without question benefit by the work of the Com-

mission in improving marketing, market research and so on without paying a halfpenny for it.
The Scottish National Farmers' Union has spoken forcibly, as have some of my hon. Friends tonight, about the original levy proposals. The union said:
Frankly, we doubt the wisdom of making provision for a rate of levy greatly in excess of what is justified by foreseeable needs.
It is true that the right hon. Gentleman has reduced the original proposals. The excess is no longer so great, but the excess still exists. Because of the exclusion of imported meat from the levy, because we believe that until the Commission has demonstrated that it is giving value for money and that it should not demand more money than it requires, because also, despite what the hon. Member for Leith has told us, without doubt a higher levy can be imposed under this scheme without coming back to this House for two years—he sought to make clear that it was impossible to impose a higher levy but that can be done— we shall vote against this Order unless the right hon. Gentleman can reassure us on these points tonight.

11.30 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes): Mr. Speaker, with your permission and that of the House, I will reply to the debate. I am extremely glad that we were able to have this extended debate, because I think that it was right that hon. Members who wished to take part in it should be enabled to do so. I have valued the contributions which have been made. We have had the opportunity of hearing differing views and we have had some time to reflect on what we heard in the debate last week. Some of the speeches made by hon. Members opposite have been inflammatory, far more so than they were in Committee on the Bill when the Commission was discussed in very great detail. It is clear that market forces of one kind or another have certainly diffused something through the Opposition since the Committee stage of the Bill.
As the hon. Member for Edinburgh, West (Mr. Stodart) said, critical interest has centred on two important aspects of the scheme—the method of collecting the levy and the exclusion of imports. Hon.


Members have shown that they attach weight not only to the likely economic and commercial consequences, but also to the presentational aspects of the equity of the scheme. My hon Friend the Member for Ebbw Vale (Mr. Michael Foot) expressed his concern that the scheme should be equitable in fact and in appearance, and that the appearance of equity was worth paying for. He made one slight error; he said that I had praised market forces. I said that I recognised their existence, as my hon. Friend must do when he writes his splendid books and sells them.
The hon. Member for Stratford-on-Avon (Mr. Maude), in particular, questioned the appearance and wisdom of a levy on home production without any charge on imports. These, therefore, are the two questions with which I should like to deal very briefly. There are a few hon. Members who would throw out the Commission bell, book and candle, but they do not represent the view of the House as a whole.
As to the point of collection, there has been argument as to whether or not the levy will be borne entirely at the point of slaughter, where it is first imposed, or whether it will be diffused through the industry as a whole. I freely admit that neither the Commission, in its repeated discussions with its Distribution Committee, nor my hon. Friend the Under-Secretary of State for Scotland and I during the course of the very lengthy representations, could move the meat trades from their belief that the levy would stick where it first fell, although there were those among them who thought that in time there could be diffusion through the trade and industry.
I have been reassured to hear so many hon. Members state their view that the levy would be spread. This is my view. There is no reason to think that this charge should differ in its impact from an increase in labour costs or any other additional charge.
However, some, although they admit this, have criticised the appearance of the scheme. How fair does the scheme appear to be? Would it be worth while incurring the extra costs of other methods of collection for the sake of demonstrating openly that the charge fell across the whole industry? That depends on the additional cost involved. The Commis-

sion certainly considered it, and we considered it very carefully. The Commission estimated roughly that the possible alternative methods of collection would cost more than three times as much-that is, three times the £125,000 provided for this purpose in the budget of the Commission.
I do not say for a moment that this is conclusive, or that other methods might not be worked out. Certainly, it is possible to work out other methods. I want to stress that, with one exception, alternatives are by their very nature bound to increase costs substantially and they will either add to the Commission's administration or give the trade more paper work, or both.
The exception would be financing from public funds which is what one hon. Gentleman suggested. But it has been made clear from the very start, and was made perfectly clear in Committee, that this would not be right. However, although hon. Members on both sides have said that the point of slaughter is clearly the convenient and economic point of collection, and although many, including the right hon. Member for Grantham (Mr. Godber), share my view about the spreading of the levy, I regret that we have been unable so far to remove all the fears and the doubts which exist in the meat trade and which have been expressed in the House.
Therefore, I should like to take this opportunity to make it clear that we do not want to ignore their arguments. It would be unfair to do so, and it is something I would not wish to do. I believe that it is a fair scheme, as well as the most economical and practical, and that this will emerge more clearly in the light of working experience over the next 12 months or two years. For that reason my right hon. Friend the Secretary of State for Scotland and I are very willing to give the trade every opportunity to come back and to show us and the Commission that the levy is sticking at the point of collection, if the trade still thinks this after a year or so of operating the scheme. In such an event we should give serious consideration to the trade's representations if it appeared that the levy was operating inequitably. I hope that after those assurances hon. Members will be satisfied that we are ready to have another look in 12 months.
References have been made again to splitting the levy. I do not want to say very much more about that. It is possible to split the levy under the Act, but it would not have been possible if hon. Members opposite had had their way. For example, the hon. Member for Norfolk, South-West (Mr. Hawkins), made a very strong speech tonight against the Commission and all its works, but I have been reading HANSARD of the Committee stage of the Act. This is what he said then:
We believe it to be a correct principle that a levy should not be paid on a live animal and thereafter a levy be paid on its carcase, on parts of its carcase and on lard coming from that carcase, or other livestock products."— [OFFICIAL REPORT,Standing Committee B. 24th February, 1966; c. 642.]
Therefore, hon. Members opposite have changed their minds. I do not complain about that, but the meat trade, farming and the House should know that they have completely switched their views in this matter.
I thought that the hon. Member for Torrington (Mr. Peter Mills) came to a very reasonable conclusion, and I hope that after hearing me he will be in the Lobby with us tonight. He talked about co-operation by the Commission to avoid duplication of effort. The Act under which the Commission operates says clearly that it shall
…enter into such consultations with other authorities and persons as appear to them required to ensure that duplication of research, advisory services and other activities is avoided so far as practicable.
Therefore, that point is covered by the Act.
The hon. Member for Clitheroe (Sir Frank Pearson) dealt with expenditure on pig development, and attributed to me words which I did not utter in my speech last week. I hope that he will read it carefully again. I said that about three quarters of the levy in the first two years would be spent on maintaining existing work, and that the largest part of this, about £1 million, is the continuing work now done by the Pig Industry

Development Authority. This reflects the fact that the Commission is starting in a responsible way and not flying too high.

My hon. Friend the Member for Sal-ford, West (Mr. Orme) asked about the exclusion of the primary producer from the effects of the levy. I have dealt with this in some detail, but I could add that there is a broad measure of agreement on both sides of the House that market forces will spread the effect of the levy, and the primary producer is certainly among those who will be affected. It will depend on the state of the market at any given time.

It would not be proper for me to deal in any detail with the import side, but hon. Members have spoken about it. If money were collected on imports on the understanding that it was to develop services to imports, the proceeds could not simply be merged in the general funds of the Commission. Australian and New Zealand exporters, for example, who had paid levies to their meat boards, as they do, often for very similar services, would be quick to ask the Commission to show that any import levy here was not being spent for the benefit of the British meat industry alone. This could inhibit promotional activities in Britain, and hon. Members would regret that more than anyone.

If we are convinced, as I am, that money should be invested on a national scale in improvements in British production and marketing, there is no alternative to ploughing back from our own production and in our own way. We have not set up the Commission to encourage the trade in imported meat, but to promote the sale of British meat, to serve the consumer, to serve the trade, and to serve the industry. I hope that everyone here tonight will now support the Order.

Question put:—

The House divided: Ayes 198, Noes 141.

Division No. 286.]
AYES
[11.41 p.m.


Allaun, Frank (Salford, E.)
Atkinson, Norman (Tottenham)
Bidwell, Sydney


Alldritt, Walter
Bagier, Gordon A. T.
Binns, John


Allen, Scholefield
Barnett, Joel
Bishop, E. S.


Anderson, Donald
Baxter, William
Blackburn, F.


Archer, Peter
Beaney, Alan
Blenkinsop, Arthur


Armstrong, Ernest
Bence, Cyril
Boardman, H. (Leigh)


Atkins, Ronald (Preston, N.)
Benn, Rt. Hn. Anthony Wedgwood
Booth, Albert




Boston, Terence
Harrison, Walter (Wakefield)
Molloy, William


Bottomley, Rt. Hn. Arthur
Haseldine, Norman
Morgan, Elystan (Cardiganshire)


Boyden, James
Hazell, Bert
Morris, John (Aberavon)


Braddock, Mrs. E. M.
Heffer, Eric S.
Moyle, Roland


Bray, Dr. Jeremy
Henig, Stanley
Murray, Albert


Brooks, Edwin
Herbison, Rt. Hn. Margaret
Newens, Stan


Brown, Bob(N'c'tle-upon-Tyne,W.)
Hilton, W. S.
Norwood, Christopher


Brown, Rt. Hn. George (Belper)
Hooley, Frank
Ogden, Eric


Brown, Hugh D. (G'gow, Provan)
Horner, John
O'Malley, Brian


Brown, R. W. (Shoreditch &amp; F'bury)
Houghton, Rt. Hn. Douglas
Oram, Albert E.


Buchan, Norman
Howarth, Robert (Bolton, E.)
Orme, Stanley


Carmichael, Neil
Howell, Denis (Small Heath)
Oswald, Thomas


Carter-Jones, Lewis
Howie, W.
Owen, Dr. David (Plymouth, S'tn)


Coe, Denis
Hoy, James
Palmer, Arthur


Coleman, Donald
Huckfield, Leslie
Park, Trevor


Concannon, J. D.
Hughes, Rt. Hn. Cledwyn (Anglesey)
Parkyn, Brian (Bedford)


Crossman, Rt. Hn. Richard
Hunter, Adam
Pavitt, Laurence


Cullen, Mrs. Alice
Hynd, John
Pearson, Arthur (Pontypridd)


Dalyell, Tam
Irvine, Sir Arthur (Edge Hill)
Peart, Rt. Hn. Fred


Davidson, Arthur (Accrington)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pentland, Norman


Davies, Ednyfed Hudson (Conway)
Jeger,Mrs.Lena(H'b'n&amp;St.P'cras,S.)
Perry, Ernest G. (Battersea, S.)


Davies, Dr. Ernest (Stretford)
Johnson, Carol (Lewisham, S.)
Price, Thomas (Westhoughton)


Davies, Harold (Leek)
Johnson, James (K'ston-on-Hull, W.)
Rees, Merlyn


Dell, Edmund
Jones, Dan (Burnley)
Robinson, W. O. J. (Walth'stow, E.)


Dempsey, James
Jones, J. Idwal (Wrexham)
Rodgers, William (Stockton)


Dewar, Donald
Judd, Frank
Ross, Rt. Hn. William


Diamond, Rt. Hn. John
Kenyon, Clifford
Ryan, John


Dickens, James
Kerr, Mrs. Anne(R'ter &amp; Chatham)
Shaw, Arnold (Ilford, S.)


Dobson, Ray
Kerr, Dr. David (W'worth, Central)
Sheldon, Robert


Doig, Peter
Kerr, Russell (Feltham)
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)


Driberg, Tom
Lawson, George
Short, Mrs. Renée (W'hampton,N.E.)


Dunnett, Jack
Leadbitter, Ted
Silkin, Rt. Hn. John (Deptford)


Dunwoody, Mrs. Gwyneth (Exeter)
Lee, Rt. Hn. Frederick(Newton)
Silkin, Hn. S. C. (Dulwich)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lee, John (Reading)
Silverman, Julius


Eadie, Alex
Lestor, Miss Joan
Slater, Joseph


Edwards, William (Merioneth)
Lewis, Arthur (W. Ham, N.)
Small, William


Ellis, John
Lomas, Kenneth
Snow, Julian


Ensor, David
Loughlin, Charles
Spriggs, Leslie


Evans, loan L. (Birm'h'm, Yardley)
Luard, Evan
Summerskill, Hn. Dr. Shirley


Faulds, Andrew
Lyon, Alexander W. (York)
Swain, Thomas


Fernyhough, E.
Lyons, Edward (Bradford, E.)
Swingler, Stephen


Fitch, Alan (Wigan)
McBride, Neil
Symonds, J. B.


Fletcher, Raymond (Ilkeston)
McCann, John
Thornton, Ernest


Fletcher, Ted (Darlington)
Macdonald, A. H.
Urwin, T. W.


Foot, Michael (Ebbw Vale)
McGuire, Michael
Varley, Eric G.


Ford, Ben
Mackenzie, Gregor (Rutherglen)
Wainwright, Edwin (Dearne Valley)


Forrester, John
Mackie, John
Walker, Harold (Doncaster)


Fowler, Gerry
Mackintosh, John P.
Watkins, David (Consett)


Freeson, Reginald
Maclennan, Robert
Weitzman, David


Galpern, Sir Myer
McMillan, Tom (Glasgow, C.)
Wilkins, W. A.


Garrett, W. E.
McNamara, J. Kevin
Williams, Clifford (Abertillery)


Gourlay, Harry
Mahon, Peter (Preston, S.)
Williams, Mrs. Shirley (Hitchin)


Gray, Dr. Hugh (Yarmouth)
Mallalieu, J.P.W.(Huddersfield,E.)
Willis, Rt. Hn. George


Gregory, Arnold
Manuel, Archie
Winnick, David


Grey, Charles (Durham)
Marks, Kenneth
Woodburn, Rt. Hn. A.


Griffiths, David (Rother Valley)
Mendelson, J. J.
Woof, Robert


Griffiths, Eddie (Brightside)
Mikardo, Ian
Yates, Victor


Griffiths, Will (Exchange)
Millan, Bruce
TELLERS FOR THE AYES:


Hamilton, James (Bothwell)
Milne, Edward (Blyth)
Mr Joseph Harper and


Hannan, William
Mitchell, R. C. (S'th'pton, Test)
Mr. Charles R. Morris.




NOES


Allason, James (Hemel Hempstead)
Clegg, Walter
Godber, Rt. Hn. J. B.


Astor, John
Crouch, David
Goodhart, Philip


Atkins, Humphrey (M't'n &amp; M'd'n)
Dalkeith, Earl of
Grant-Ferris, R.


Baker, W. H. K. (Banff)
Dance, James
Gresham Cooke, R.


Bessell, Peter
Dean, Paul (Somerset, N.)
Griffiths, Eldon (Bury St. Edmunds)


Biffen, John
Deedes, Rt. Hn. W. F. (Ashford)
Gurden, Harold


Birch, Rt. Hn. Nigel
Dodds-Parker, Douglas
Hall, John (Wycombe)


Black, Sir Cyril
Donnelly, Desmond
Hall-Davis, A. G. F.


Boardman, Tom (Leicester, S.W.)
Doughty, Charles
Hamilton, Michael (Salisbury)


Body, Richard
Drayson, G. B.
Hawkins, Paul


Bossom, Sir Clive
du Cann, Rt. Hn. Edward
Heseltine, Michael


Boyle, Rt. Hn. Sir Edward
Eden, Sir John
Hill, J. E. B.


Braine, Bernard
Elliot, Capt. Walter (Carshalton)
Holland, Philip


Brinton, Sir Tatton
Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Howell, David (Guildford)


Bromley-Davenport, Lt.-Col.SirWalter
Emery, Peter
Hunt, John


Bruce-Gardyne, J.
Errington, Sir Eric
Iremonger, T. L.


Bryan, Paul
Eyre, Reginald
Jenkin, Patrick (Woodford)


Campbell, B. (Oldham, West)
Fisher, Nigel
Jopling, Michael


Cary, Sir Robert
Foster, Sir John
Kershaw, Anthony


Chichester-Clark, R.
Gilmour, Sir John (Fife, E.)
Kimball, Marcus


Clark, Henry
Glover, Sir Douglas
King, Evelyn (Dorset, S.)







Kirk, Peter
Peel, John
Teeling, Sir William


Kitson, Timothy
Percival, Ian
Temple, John M,


Knight, Mrs. Jill
Peyton, John
Thorpe, Rt. Hn. Jeremy


Lambton, Viscount
Pike, Milss Mervyn
Turton, Rt. Hn. R. H.


Lane, David
Pink, R. Bonner
van Straubenzee, W. R.


Langford-Holt, Sir John
Pounder, Rafton
Vaughan-Morgan, Rt. Hn. Sir John


Legge-Bourke, Sir Harry
Powell, Rt. Hn. J. Enoch
Waddington, David


Longden, Gilbert
Pym, Francis
Wainwright, Richard (Colne Valley)


Loveys, W. H.
Ramsden, Rt. Hn. James
Ward, Dame Irene


Lubbock, Eric
Rawlinson, Rt. Hn. Sir Peter
Weatherill, Bernard


Mackenzie,Alasdair(Ross&amp;Crom'ty)
Rhys Williams, Sir Brandon
Webster, David


Maddan, Martin
Ridley, Hn. Nicholas
Wells, John (Maidstone)


Maginnis, John E.
Ridsdale, Julian
Whitelaw, Rt. Hn. William


Maude, Angus
Rossi, Hugh (Hornsey)
Williams, Donald (Dudley)


Maxwell-Hyslop, R. J.
Royle, Anthony
Wills, Sir Gerald (Bridgwater)


Mills, Peter (Torrington)
Russell, Sir Ronald
Wilson, Geoffrey (Truro)


Monro, Hector
Scott-Hopkins, James
Winstanley, Dr. M. P.


Morrison, Charles (Devizes)
Sharples, Richard
Wolrige-Gordon, Patrick


Munro-Lucas-Tooth, Sir Hugh
Silvester, Frederick
Worsley, Marcus


Murton, Oscar
Sinclair, Sir George
Wright, Esmond


Nabarro, Sir Gerald
Smith, Dudley (W'wick &amp; L'mington)
Wylie, N. R.


Neave, Airey
Smith, John (London &amp; W'minster)
younger, Hn. George


Noble, Rt. Hn. Michael
Stainton, Keith



Onslow, Cranley
Steel, David (Roxburgh)
TELLERS FOR THE NOES:


Osborn, John (Hallam)
Stodart, Anthony
Mr. Jasper More and


Page, Graham (Crosby)
Tapsell, Peter
Mr. Anthony Grant.


Pardoe, John
Taylor, Sir Charles (Eastbourne)



Pearson, Sir Frank (Clitheroe)
Taylor, Frank (Moss Side)

Orders of the Day — CIVIL EVIDENCE BILL [Lords]

As amended (in the Standing Committee),considered.

New Clause 1

ADMISSION OF STATEMENT OF EMPLOYEE AGAINST EMPLOYER

No statement by an employee shall be inadmissible as evidence in civil proceedings by reason only of the fact that the employee was not authorised by his employer to make an admission, but the employer shall not be estopped from denying the truth of the statement.—[Mr. Alexander W. Lyon.]

Brought up, and read the First time.

11.50 p.m.

Mr. Alexander W. Lyon: I beg to move, That the Clause be read a Second time.
This is an important Bill, coming on at an intolerable time. I hope that I shall not unduly weary the House with the first two Clauses. The first, in particular, is of some importance. It raises a point which is small in scope, but important in practice in many types of civil litigation. A great many of the cases heard in the civil courts are either actions in negligence against an employer, or actions in breach of statutory duty against an employer. Often the best evidence that there is of negligence or breach of statutory duty is some admission made by the employer's servant immediately after the accident.
I think of a case where some machinery should have been switched off and caused

an accident because it has not been switched off. The man who should have done this says immediately after the accident "I'm sorry. I forgot." This is the typical example which occurs frequently in the courts. Although the employer's servant is not a party to the action and anything that he says, therefore, is probably, technically, hearsay, one gets in it fairly frequently under theres gestae rule. On occasions, one is stifled from doing that by the rule that an agent is not allowed to make an admission on behalf of his principle unless he has been authorised to do so. This rule has been applied to a master-servant relationship where, in my judgment, it has very little relevance. It has been applied in such a way that many of these admissions, which are highly material and may very well point to the real truth of the situation are not accepted by the courts. I have had this happen to me on so many occasions that it is a matter of some importance, at any rate in the kind of litigation in which I am engaged.
Therefore, I look for some relief in this highly important Bill which attempts to allow, for the first time, a good deal of evidence consisting of out-of-court statements, which otherwise might be excluded by the hearsay rule. The point I am seeking to bring to the attention of the House is not covered by Clause 2, which says that
… a statement made, whether orally or in a document or otherwise, by a person, whether called as a witness in those proceedings or not, shall, subject to this section and to


rules of court, be admissible as evidence of any fact stated therein of which direct oral evidence by him would be admissible.
The difficulty about the point that I am raising is that if the servant were called by the plaintiff to say, if he was prepared, the words which he used immediately after the accident, the likelihood is that the evidence would be ruled out on the basis of the rule to which I have referred, namely, that an agent is not entitled to make an admission on behalf of his principle unless authorised to do so. It is ruled out, not on the basis that it is hearsay, but on the basis that it is not authorised. For this reason, it is necessary that there should be an addition to the Bill to cover the point.
It may seem to non-lawyers, and perhaps even to lawyers who are not involved in litigation of this kind, that the point is a trivial one. but I assure the House that on many occasions, particularly in factory cases, where the plaintiff may have difficulty in establishing his case, this crucial piece of evidence, which might turn the scales in his favour, is not admitted.
If we are to allow hearsay evidence to be used at the discretion of the court, in proper cases, I cannot see why the same provision should not be extended to this type of what is technically hearsay. I therefore hope that the Government will accede to my request, although at this hour of the night I have no desire to put the new Clause to a vote.

The Solicitor-General (Sir Arthur Irvine): My hon. Friend the Member for York (Mr. Alexander W. Lyon) raises in his new Clause what is unquestionably an important point. His Clause would make an out-of-court statement by an employee admissible, but not conclusive evidence, in civil proceedings against his employer notwithstanding that the employee had no authority to make an admission. I assure my hon. Friend that we have gone carefully into this matter.
The point I would like to emphasise is that the Law Reform Committee was fully alive to the difficulties created by the rule to which my hon. Friend has drawn attention, and the Committee has referred to it in paragraph 31 of the Thirteenth Report. In the Government's view, the presence of Clause 2 in the Bill makes my hon. Friend's new Clause

unnecessary for the purpose which he has in mind of making admissible against an employer his servant's statement which is first-hand hearsay. As I see it, this is already achieved by Clause 2.
If I understood my hon. Friend aright, his anxiety seems to be founded on the belief that as a matter of law, quite apart from the rule against hearsay, a servant's unauthorised statement is not admissible. That is the difficulty which is felt by my hon. Friend. With great respect, however, I am not satisfied that it is a substantial difficulty. I would have thought that that rule is, broadly speaking, an aspect of the rule as to the non-admissibility under the existing law of hearsay evidence. Obviously, it follows from the view which I have just expressed, if I am right, that the matter is sufficiently covered by Clause 2 of the Bill. That is the answer which I must give to my hon. Friend, but I say again that it is an answer which is given only after careful thought and consideration.
12 m.
My hon. Friend's new Clause would confine its effect to employees and employers. The rule to which he refers applies equally to principals and agents, and if it were either necessary or desirable to have a new Clause I think my hon. Friend would agree that the principle of his new Clause should apply to both. But that is merely a passing comment upon the matter. It does not go to the substance of the issue.
On the main point, the Government's view is that this matter is met by Clause 2. As I said, it really comes down to the question whether the rule to which my hon. Friend refers is founded upon the principle hitherto applying that hearsay evidence is not admissible or whether it is founded upon something else. On the view that we take it is an aspect of the hearsay rule, and the mischief is avoided by Clause 2.

Mr. Alexander W. Lyon: I did not, for obvious reasons, at this stage of the evening, start quoting authority, but the authority I have is a decision of the Court of Appeal in 1889, when Baron Pollock gave the leading judgment, and there is no reference at all to the hearsay rule, in the course of the judgment, which excludes such evidence. It is based entirely on the basis of the rule that an


agent is not allowed to make an admission unless he is authorised to do so. On that basis, and that being the authority, surely no court would be able to say that such evidence was admissible, now that the Civil Evidence Act, as it will be, has admitted hearsay?

The Solicitor-General: I am much obliged. I have had that authority in mind, and I have also had in mind the authority of more recent day, the case of Burr v. Ware Urban District Council, the 1939 case, in which the Court of Appeal refused, in a fatal accident case, where the only survivor of the accident was the defendant's driver, to allow an interrogatory to be administered to the defendant's driver to elicit a statement made at the inquest held on the plaintiff's son who had been killed in the accident. That is another case I had in mind, and of more recent date.
I do not think that any hon. or right hon. Member of the House would wish this argument to proceed very much further. There might be argument in the Court of Appeal about this. These cases are all cases of hearsay, whether their root is in the hearsay principle or otherwise. As I say, I have given careful attention to this, and we are satisfied that Clause 2 meets the case.

Question put and negatived.

New Clause 2

INADMISSIBILITY OF EVIDENCE OBTAINED BY UNAUTHORISED INTRUSIONS INTO PRIVACY

No evidence which has been obtained by unauthorised intrusions into the privacy of the individual against whom the evidence is sought to be used shall be admissible in any civil proceedings.—[Mr. Alexander W. Lyon.]

Brought up, and read the First time.

Mr. Alexander W. Lyon: I beg to move, That the Clause be read a Second time.
This Clause deals with an aspect of the law in which I have taken considerable interest over the last two years. What is required, I suspect, is a completely new enabling Act to indicate what is unauthorised intrusion into privacy, but I raise the point upon this Bill because of

discussions I have had with many people about the right to privacy and because of particular cases such as the one in the Divorce Court only a year or so ago, when a private inquiry agent had had a "bugging" device installed in an hotel bedroom in order to obtain evidence of adultery and the Divorce Court judge strongly criticised this method of obtaining evidence.
Because of the rule that no evidence can be excluded simply because it was improperly obtained he was bound to accept the evidence and to rule in favour of the petitioner. In such cases one would have no redress unless there were a rule rather like this in relation to the method employed to obtain evidence.
For instance, if it were ever enacted by the House that there was such a thing as a tort of intrusion into privacy, and that damages could be awarded, it would still be worth the risk for a private inquiry agent to "bug" a hotel bedroom. If he were then mulcted of damages, they would be added to his bill to his client. This is apparently the attitude of one such agent who uses these devices frequently in his work. He has no fear of criminal or civil proceedings over invasion of privacy, because it merely becomes an expense upon his ultimate account to his client, who would be only too willing to pay, provided that he got the evidence which he was seeking.
In such circumstances, the mischief could be cured only if the evidence were not admissible. Since we have not yet created such a tort, it will be difficult to accept the new Clause, but I hope that my hon. and learned Friend will at least be able to give us some assurance that the Government have this in mind and will do something about it.

Sir Peter Rawlinson: I have some sympathy with the hon. Member for York (Mr. Alexander W. Lyon). In Committee, we discussed the question of the "fruit from the poisoned tree", as it has been called elsewhere, and agreed how objectionable it was to obtain evidence in these ways. We must face the fact that this will soon develop even more, and I agree that we must try to restrain it. But I foresee, as did the hon. Member, the difficulties of trying to import it into the Bill. It would also have


to be in the criminal law and in a different form than the hon. Member proposes. But he is right to draw attention to this matter, which will be one of the gravest subjects which we will have to face in the administration of the criminal and civil law in future.
Therefore, although I sympathise with the hon. Member, I agree that it would not be a good idea to import it into the Bill at this stage.

The Solicitor-General: I share the view of the right hon. and learned Member for Epsom (Sir P. Rawlinson) that the new Clause raises, in a different form, the issue of the "fruit of the poisoned tree" which we debated in Committee on an Amendment which he moved, when the arguments against introducing this doctrine into English law were fully deployed. The arguments were, first, that the question is of great importance in criminal than in civil law, and that the recommendations of the Criminal Law Revision Committee should be awaited; and, second, that the proposal was a far-reaching one which has not yet been fully considered and which should not be implemented at a late stage of the current Bill without an opportunity for detailed examination.
On these grounds, I cannot accept the Clause, but I certainly do not seek to counter the argument that this is an important matter and raises a subject which we should watch carefully.
The recommendation I make that the new Clause should not be accepted is not founded on any lack of recognition of the importance of the subject, to which my hon. Friend has given much thought and attention. This does not seem to us to be the appropriate point at which to introduce the principle; and I repeat that in all likelihood the importance of this question is greater in criminal than in civil law and that the recommendations of the Criminal Law Revision Committee are awaited.

Question put and negatived.

Clause 4

ADMISSIBILITY OF CERTAIN RECORDS AS EVIDENCE OF FACTS STATED

The Solicitor-General: I beg to move Amendment No. 1, in page 3, line 35,

leave out from 'person' to 'in' in line 36 and insert 'acting'.
I suggest that it would be convenient to discuss the following Amendment, at the same time, Amendment No. 2.

Mr. Deputy Speaker (Sir Eric Fletcher): If there is no objection, so be it.

The Solicitor-General: This series of Amendments extends the meaning to be attached under subsection (3) to a person acting under a duty so as to make that expression include a person acting in the course of any trade, business or profession, instead of
… a person performing a duty falling to be performed by him in the course of any trade …".
In paragraph 16 of its Report on hearsay evidence, the Law Reform Committee discussed the corresponding provision of the Evidence Act, 1938, which provides for the admissibility of statements contained in written records. One of the conditions for admissibility was that the statement must have been recorded in the performance of a duty to record relevant information. Of this requirement the Law Reform Committee said:
The requirement that the statement must have been made in the performance of a duty to record information is, we think, a valid one.
The concept of duty is, in our view, however, not appropriate to the case of the one-man business man who keeps his own records. This series of Amendments is designed to meet that instance. The owner of a one-man business is under no duty to himself, although he would find it, in practice, essential, to keep formal business records. It would be anomalous if entries in his ledgers made by him were not admissible whereas entries made in similar ledgers made by another businessman's clerk were admissible, simply because he was an employee. Convenience and logic both seem to invite the view that entries made in the course of business by the proprietor should be treated on a par with similar entries made by an employee.

Amendment agreed to.

Further Amendment made: No. 2, in line 38, leave out 'by virtue' and insert' for the purposes'.—[The Solicitor-General.]

Clause 6

PROVISIONS SUPPLEMENTARY TO ss. 2 TO 5

The Solicitor-General: I beg to move Amendment No. 3, in page 7, line 5, at end insert:
(5) If any person in a certificate tendered in evidence in civil proceedings by virtue of section 5(4) of this Act wilfully makes a statement material in those proceedings which he knows to be false or does not believe to be true, he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or a fine or both.
This Amendment attracts a criminal penalty to the wilful making of a false statement in a certificate tendered in evidence under Clause 5(4), which deals with statements produced by computers; a certificate to the effect that the conditions have been satisfied under which a computerised record is admissible.
As introduced, the Bill contained no criminal sanction in respect of statements contained in such a certificate. Whether there should be a criminal sanction is debatable, and thought was given to this matter in Committee. On the one hand, if the certificate procedure is to be freely used, those concerned must not be, so to speak, frightened off. The attachment of such a sanction could have that effect. We felt that we might possibly run the risk of reducing the overall usefulness of the procedure.
On the other hand, not all parties to civil actions are scrupulously honest and the absence of any sanction might lead a dishonest person to tell a deliberate lie in the knowledge that he would not, in the normal course, have to go into court to support his statement on oath and thus expose himself to a possible prosecution for perjury. Moreover, the honest but possibly not too careful man has nothing to fear under this Amendment, because the offence is committed only if the falsehood is wilful.
12.15 a.m.
The arguments that took place in Standing Committee indicated, certainly to my mind, a rather striking amount of support for the principle that a criminal sanction should apply in this instance. That view was expressed by the right hon. and learned Member for Epsom (Sir P. Rawlinson), the hon. and

learned Member for Southport (Mr. Percival), my hon. and learned Friend the Member for Warrington (Mr. W. T. Williams) and others. I undertook to give further consideration to the point, and on the strength of that I think the right hon. and learned Gentleman withdrew his Amendment.
When I gave this undertaking I made it clear that in any event it would not be desirable, in my view, to require a statutory declaration since to make that requirement would greatly complicate the procedure and would lead to unnecessary expense. I accordingly indicated that a better precedent was likely to be afforded by Section 89 of the Criminal Justice Act, 1967. Under that Section a person who wilfully makes a false statement in a statement in writing tendered in evidence in lieu of his giving oral evidence in committal proceedings or at a criminal trial, is liable on conviction on indictment to two years' imprisonment or a fine, or both.
The proposed new subsection (5) to Clause 6 follows Section 89 of the Criminal Justice Act in this respect. It also follows Section 89 in attracting a criminal penalty only to a false statement which is material in the proceedings in which the certificate is tendered in evidence. Thus, in effect, the offence will be committed only if the deliberate falsehood relates to one or other of the conditions of admissibility applicable to the computerised record in question. No offence will be committed if the person concerned chooses, for what may be good reasons, to conceal, for example, his true name. In this instance we have thought it well to take account of the strength of the views expressed on this point in the Standing Committee, and I trust that the Amendment will be welcomed.

Sir P. Rawlinson: I am glad that the Solicitor-General has had second thoughts. He promised to look at this point in Standing Committee after we had moved the Amendment asking for a statutory declaration. I had never understood why there should be any real fear about frightening off people who are to make statements for the compilation of records which are to be computerised and then used in actions. If they are to be frightened off, they ought to be frightened off.
If a person wishes to take advantage of this system he should do it with accuracy and care, and he should be prepared to stand by what he has said and by the figures and facts which he has compiled. For this reason my hon. and learned Friend the Member for Southport (Mr. Percival) and I put down the Amendment asking for a statutory declaration. I accept that the statutory declaration may be too cumbersome a process, and I would have thought that the proposal which is to attract the same provisions as apply in the Criminal Justice Act is correct.
I am glad that the Solicitor-General has agreed to this proposal, and I am sure that it will strengthen and improve the Bill.

Amendment agreed to.

Clause 8

RULES OF COURT

Sir Peter Rawlinson: I beg to move Amendment No. 4, in page 9, line 31, at end insert:
(6) No rule of court under this Act shall be made by the Lord Chancellor save with the approval of a majority of persons who have been appointed under section 99 of the Supreme Court of Judicature (Consolidation) Act 1925 who are present and attending the meeting at which rules of court under this Act are to be made; and the Lord Chancellor shall make any rule of court so approved by such majority and shall not refuse to make any such rule.
Clause 8 is an important Clause. It provides for the making of the rules of court, and in its provisions it establishes conditions before a statement can be given in evidence under Clauses 2, 4 and 5, which are the main Clauses of the Bill.
For instance, Clause 8(2)(a) provides that the rules shall make requirements about notices to other parties and give particulars, including particulars of persons making or recording a computer statement. Subsection (2)(b) provides that there shall be rules made about counter notices to require persons to be called as witnesses whether or not they should and must and have to be called. Subsection (3)(a) confers discretion on the court even if the requirements with regard to Clause 2 (hearsay), Clause 4

(records of facts), or Clause 5 (computers) have not been complied with.
Subsection (3)(b) provides that rules shall be made as to the power given to the court to give directions as to whether and in what conditions a statement within Clause 2(1) (hearsay) should be made. Subsection (4) provides that rules may be made for preventing a party from adducing evidence which could otherwise be adduced by virtue of Clause 7. Accordingly, Clause 8 provides for the effective machinery for operating the Bill, and this effective machinery is given by the Clause to the Rule Committee.
The Law Revision Committee to which reference has been made by the Solicitor-General, and which is the Committee which fathered this Bill by making the recommendations of their Thirteenth report, categorically recommended that it would be convenient to incorporate the initial rules both for the High Court and the county court in a Schedule to the Act. As was pointed out by the Law Reform Committee, this had been done in the Supreme Court of Judicature Act 1873. They recommended that that should be done and that thereafter, if necessary, the rules could be amended if in the light of experience those rules were found not to be working effectively, and they repeated this in the summary at page 24 of their Thirteenth report.
The absence of a Schedule dealing with the rules was raised on Second Reading and, as I understand it, the reply from the Government was that it would be too inconvenient, it would be too bulky, it would extend the Bill too much, it would be difficult to work out the rules at this stage and it would be better to have the Bill on the statute book and then set about formulating the rules. At the time I did not find that very convincing, and I should have thought it would have been much more convenient to have a Schedule.
At some time, these rules will have to be made. A Rule Committee must be established and the rules made, and it would be far better to delay the Bill until that had been done rather than, as usual, have this piecemeal legislation. There are practising lawyers, and indeed six judges, on the Law Reform Committee who all made this recommendation, and I am surprised that the Government should have rejected that proposal

and gone ahead with the Bill without the rules having been set out in a Schedule.
I move the Amendment because, as Parliament will not have the opportunity of examining them in the Schedule to the Bill—though doubtless the rules will be placed before the House and we can if necessary pray against them at another time—if Parliament is to leave it to the Committee it is important to know on what terms we leave these rule-making powers to the Committee.
The Rule Committee, as is apparent from the Clause, consists of persons appointed by the Lord Chancellor. The rules are made by the Lord Chancellor and any four or more of, as it were, the presidents of the different divisions, four judges of the Supreme Court, two practising barristers and two practising solicitors—all appointed by the Lord Chancellor. Obviously, they are widely experienced persons. But, as I understand it, the present attitude of the Administration and of the Lord Chancellor is that if the Lord Chancellor disagreed with what the Rule Committee proposes he has the power of veto and can say whether or not he will make the rule. If that is so, Parliament is handing over to a Minister the power to lay down what rules he likes, and the function of the Rule Committee is purely advisory.
I suggest that Parliament should not do that. Parliament does not have the rules in a schedule, so it should make it perfectly clear, as I hope the Amendment does, that it is the Rule Committee that will make the rules, and that even if the Lord Chancellor does not like a rule that is proposed by a majority of the members of the Rule Committee attending he must make that rule.
I say that because it is not long since we had a debate in the House about the rules which were made by the Rule Committee. On 8th April I posed to the Attorney-General questions about the position with regard to the Lord Chancellor and the Rule Committee. I asked the right hon. and learned Gentleman whether he thought that the Lord Chancellor had this power of veto, and what were the powers of the Rule Committee. I never received any answer from the Attorney-General to the several questions I then posed, and those questions

were afterwards posed in the professional Press but were never replied to.
I can only assume from that that the Government's view is that the Minister, in this case the Lord Chancellor, has that power. If the Lord Chancellor does assume that power, it is right that Parliament should make clear exactly what it wants. Parliament should make it clear that it is the Rule Committee which has the effective power.
The Amendment therefore seeks to control the power of the Minister, and so to say that, in effect, a rule shall not be made without the agreement of the Rule Committee; and that if a majority of the Rule Committee believes that a rule is appropriate and should be made, the Lord Chancellor may not veto it, but shall have to make it. In that way we shall get a Rule Committee to which we shall be giving very extended power but which will have some control over the rules it makes.
I consider this to be a very important matter in the Bill, and important also with regard to Parliament and parliamentary control over the legislation that is made. I therefore hope that the Solicitor-General and the Government will accept the Amendment.

12.30 p.m.

Sir Eric Errington: I want to speak not so much from the strictly legal point of view, but from the point of view of the difficulty that arises in dealing with a new contrivance —the computer. It seems that it alters the whole atmosphere of the question of rules.
I take the view that computers are not always right. There must be some protection which should have very careful consideration and may need amendment at some time. The sort of situation which makes me anxious is that where in an ordinary county court judgment summons it may be that a computer will be used, perhaps in a number of cases in which the defendant may not be in a position to combat the result of the computer's figures. That is a serious position, and one which is not entirely a legal one. It requires a great deal of thought to ensure that justice is done between the person who can afford and use a computer and the ordinary person who is not in that position. That is a


very strong argument for strengthening the Rule Committee.
I disagree with my right hon. and learned Friend the Member for Epsom (Sir P. Rawlinson), who suggested that it is an advantage to be able to change the rules so that if the first effort to make the computer work fairly fails it can be amended.

The Solicitor-General: I quite agree with the great importance that the hon. Member for Aldershot (Sir E. Errington) attaches to the treatment of computers. They constitute a novelty and as such pose unexpected and novel questions of evidence. I entirely share the concern he has expressed about them. I do not think I have more to say in response to his speech than to remind him that, whatever criticisms may be made of the Bill, it cannot be criticised on the ground that an elaborate and serious attempt has not been made to deal with this. The matter is dealt with in great care and elaboration in Clause 5. In addition, in Clause 8 provision is made for the Rule Committee to deal with points arising under this novel head. While agreeing with him about the importance of this, I invite the hon. Member to take the view that the Bill deals carefully and conscientiously with the subject.
The Amendment has unmistakable overtones of an earlier discussion, as the right hon. and learned Member for Epsom (Sir P. Rawlinson) pointed out when moving it. It is none the worse for that. I do not pursue the point that as matters have developed the House has not had the opportunity to study the initial rules in a Schedule. I was glad to have an indication from the hon. Member for Aldershot that there is an advantage in having this matter dealt with in rules outside a Schedule to the Bill. I have nothing to add to what has been said already on that subject.
The Amendments would have the effect that rules of court under the Bill could be made only with the approval of the majority of the members of the Supreme Court Rule Committee attending the relevant meeting and that the Lord Chancellor would be obliged to make any rule so approved. I repeat that the Amendment has overtones of an earlier discussion which took place when the rule; under Section 7 of the Matri-

monial Causes Act, 1967, came to be considered. That Act provided that the authority having power to make rules was to be the Lord Chancellor together with any four or more of a number of specified persons.
The Amendments are concerned with the rule-making powers of the Supreme Court Rule Committee, but for this purpose there is no distinction between the two, because under Section 99(4) of the Judicature Act rules of court may be made by the Lord Chancellor together with any four or more of the following: the Lord Chief Justice, the Master of the Rolls, the President of the Probate, Divorce and Admiralty Division, four other judges of the Supreme Court, two members of the Bar Council, and two solicitors of whom one must be a member of the Council of the Law Society.
It is clear from the wording of Section 99 of the Judicature Act that no rule can be made without the Lord Chancellor's concurrence. This is no accident. The Lord Chancellor has been a necessary concurring authority in the making of rules since at least 1881, and in the case of county court rules he is empowered by Section 102(8) of the County Courts Act, 1959, to allow or disallow or alter rules submitted to him by the County Court Rule Committee, of which he is not a member.
It is thus plain that it has been the deliberate intention of Parliament to give to the Lord Chancellor the final responsibility for deciding whether a rule approved by the specified number of members of these committees should be made, and in so providing Parliament has no doubt borne in mind the obvious point that, should rules be made by one of the rule committees and be challenged in Parliament on a motion to annul, the Lord Chancellor, or the Attorney-General on his behalf in the House of Commons, would have to defend them and it would put the Lord Chancellor in a very difficult position if he had to defend rules in the making of which he had not concurred and which could be contrary to Government policy or inconsistent with a decision already taken by Parliament, or both.
This, I hope, will be recognised as a point of very considerable substance in this controversy. It would not be acceptable to anybody on either side of the


House if, in the hypothesis of a rule committee making a recommendation which was manifestly contrary to the intention of Parliament as previously expressed, the decision of the rule committee should prevail. It is this consideration which has the result of the provisions in the Judicature Act taking the form that they do.
It is true that on the strict wording of the Judicature Act the Lord Chancellor could make rules notwithstanding the opposition of seven members of the Committee, provided that he could get four members to support him. In practice, the Lord Chancellor has never made rules against the wishes of the majority of the Committee, and there is no practical possibility of his doing so.
Some such provision as Section 99(4) is necessary, however, because rules may have to be made at comparatively short notice, and in circumstances in which it is impracticable to assemble the full Committee. The object of the provision is not to enable the Lord Chancellor to override the majority but to create a reasonable quorum.
There is the further objection to the Amendment that if it were desirable to provide that majority approval was required such a provision should extend to all rules made by the rule-making authority and not merely to rules under the Bill. The right hon. and learned Gentleman would agree that there is no special feature affecting hearsay rules which justifies such treatment for them.
The Amendments are defective in the following respect: rules of court may be made under the Bill not only in respect of the Supreme Court but any court or tribunal to which the Bill is relevant. In particular, the Clause contemplates both county court and magistrates court rules. The effect of the Amendments would be that these rules could not be made without the approval of the majority of the Supreme Court Rule Committee.
That is merely a criticism of the drafting that I make with every respect. I have no more to say on the main issue. I have shown the basis of our objection, and I must ask the House to resist the Amendment.

Sir P. Rawlinson: I accept that this is a new proposal, but I think that a new

practice has developed. It is because we fear that that is so that we take this, the first opportunity, to introduce a new proposal that we think is sensible and right. It is suggested that if the Rule Committee proposed a rule which the Lord Chancellor did not like it would be difficult for him or the Attorney-General to defend it. But surely he could say it was made by the Rule Committee and that he did not like it, and he would not then have to defend it? Why must Ministers always be defending such things, and the whole life of the Administration be thought to depend on such matters?
Parliament should say that it should give rules committees power to make rules, not Ministers. It does not matter how distinguished the Minister is, the rules committee should have the final say. That is why we have put forward the Amendment, for we understand that a practice has grown up only very recently under which a veto will be imposed on the Rule Committee.
However, I appreciate that there are some defects in the drafting of the Amendment, for which I am wholly responsible. For that reason, and that reason alone, I shall not invite my hon. Friends to join me in pressing the Amendment to a Division. But I give a very grave warning to the Government that the Rule Committee should be given this power and should be able to exercise it.
I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 15

PRIVILEGE FOR CERTAIN COMMUNICATIONS RELATING TO PATENT PROCEEDINGS

Mr. Graham Page: I beg to move, in page 17, line 18, after 'proceedings', insert 'before the High Court or'.
The Clause gives to those who consult patent agents the same privilege with regard to their communications with them as they would have if they were consulting a solicitor. That privilege is that neither party shall be forced to disclose in litigation communications made for the purpose of pending or contemplated proceedings. This is frequently referred


to as "solicitor's privilege". It is nothing of the sort. It is no privilege to the solicitor. It is a privilege to everyone who consults a solicitor that the solicitor shall not be forced to disclose the communications which have been made to him, provided that they are communications in connection with pending or contemplated proceedings.
12.45 a.m.
The Law Reform Committee, in its Sixteenth Report—Command 3472—after dealing with and approving privilege in respect of consultations between a solicitor and his client, went on to deal with communications between a patent agent and the person who consults him. Paragraph 25 said:
It has been represented to us that communications of the kind described in paragraphs 18 to 23 above,"—
communications between solicitors and clients—
if made for the purpose of pending or contemplated proceedings in the Patent Office or the Patents Appeal Tribunal to be conducted by a patent agent, should be entitled to the same privilege as they would have if the patent agent were a 'professional legal adviser'. We think that it is clearly right that they should and, in our view, the principle on which is based the common law rule of privilege in aid of litigation would extend to such communications.
So there has been inserted in Clause 15 a similar privilege for communications between a patent agent and his client as between a solicitor and his client when they are made in connections with appeal proceedings before the Patent Office or the Patents Appeal Tribunal.
But the Bill goes a little further than the Report. It gives privilege even when these communications are in connection with an application to the Patent Office, when perhaps no litigation such as we understand the word is pending. But in paragraph 24 the position is considered of when the patent agent is consulted in connection with High Court proceedings and separate perhaps from proceedings in the Patents Appeal Tribunal. Paragraph 24 begins:
The category of professional legal advisers is confined to barristers and solicitors. Patent agents do not fall within it and there is no general privilege for professional communications between them and their clients. Insofar as they are instructed in connection with pending or contemplated proceedings in the High Court, no problems arise; communications with them would be privileged under the

rules referred to in paragraphs 20, 21 and 23 above, since in these proceedings solicitors and counsel are also instructed.
With respect to the Committee, I think that it has fallen into error there. There are many occasions in which a client may consult a patent agent without first consulting a solicitor or counsel. We are left with the extraordinary position that if, when the client decides to go to his solicitor first when he is concerned with some problem which may lead to High Court proceedings over an invention, the solicitor takes him along to a patent agent, there is privilege. Communications then between the client and the patent agent will be privileged. They are in contemplation of High Court proceedings. But if the client goes to a patent agent first, as frequently he does, without consulting a solicitor, then the communications between the client and the patent agent are not privileged. This is where the Committee went wrong in its Report. It said that there was no problem, because on every occasion when a client consulted a patent agent, he would have a solicitor or counsel and would have been taken to the patent agent by the solicitor, which is not so; it does not always happen.
Therefore, I have moved the Amendment in order to get over this anomaly. It seems ridiculous that, merely because a client goes to the solicitor first and is then taken to the patent agent, the communications between the client and the patent agent will be privileged, but if the client goes to the patent agent on his own and asks for advice, the communication will not be privileged. If my Amendment is agreed to, communications will also be privileged when the client goes to the patent agent on his own and asks for advice in contemplation of proceedings.

The Solicitor-General: The Amendment would extend Clause 15 so as to make it confer on patent agents a legal professional privilege in respect of proceedings before the High Court as well as proceedings before the Comptroller-General and the Patents Appeal Tribunal under the Patents Act, 1949.
The history of the matter is that at a late stage in the progress of the Bill, in the middle of June, suggestions were received by us informally from the Law Society that the privilege proposed to be


conferred on patent agents should extend to communications made when a patent agent was consulted in connection with High Court proceedings. The point was made that the patent agent in substance acted as a legal adviser and that, as many patent agents were in fact solicitors, the existence of the privilege should not depend on whether such an agent was consultedqua agent orqua solicitor. It was said that the Chartered Institute of Patent Agents supported this proposal.
It remains true that the proposal is directly contrary to what was recommended by the Law Reform Committee in its Report on Privilege in Civil Proceedings. The hon. Member for Crosby (Mr. Graham Page) founded his argument, very fairly, on the basis that the Committee had been wrong. Leaving aside for a moment the merits of the issue, hon. Members will appreciate that one would have to be extremely cautious before going against a recommendation of the Committee on a point raised as late as this was raised. I readily acknowledge that that does not go to the merits, but it is a consideration which must clearly be in our minds.

Mr. Graham Page: Surely the hon. and learned Gentleman will agree that the Committee did not recommend this because it thought that it already existed and that it was therefore unnecessary to give it. It thought that a client always consulted a patent agent arm in arm with his solicitor, which is just not the fact.

The Solicitor-General: The substance of the hon. Gentleman's argument was that the Committee was wrong. He used that expression perfectly clearly and without equivocation. When that is said about a recommendation of a Committee of this calibre in the context of a proposal coming forward so late, the House would obviously be well advised to proceed with the greatest possible caution.

Mr. R. J. Maxwell-Hyslop: I did not catch when it was that the hon. and learned Gentleman said that this proposal came forward. Was it in the middle of July, or no less than five weeks ago which he keeps describing as being so late? Was it no less than five weeks or a month ago which is so late that nothing can be done about it? It seems a very generous period of time.

The Solicitor-General: It was the middle of June, but the hon. Gentleman cannot make much of that. It was received by us two days before we started consideration of the Bill in Committee. On any fair view I should have thought that it came too late. I have some difficulty in seeing on what grounds the hon. Gentleman considers this Amendment to be necessary. If the patent agent is not also the party's solicitor, communications passing between him and the solicitor, or him and the client will have privilege under the current rules. That is set out in Paragraphs 18–23 of the Law Reform Committee's report. The only circumstance in which the Amendment would confer privilege where none exists under the current law, or under Clause 15 as drafted, would be that in which the communication passed between the patent agent and the client, otherwise than for submission to the client's solicitor. This I would have thought could occur in practice only where the patent agent was also the client's solicitor and was acting as patent agent, but not as solicitor—a circumstance which I would think unlikely, since the communication,ex hpothesi is being made for the purpose of pending or contemplated proceedings in the High Court.
I am not persuaded that this Amendment is necessary or desirable. I confess that if the proposal was put seriously, it is a pity that the Law Society, who were specifically invited to submit evidence to the Committee, and responded fully to that invitations, did not make it at a much earlier stage. In the face of the Committee's recommendation, we feel that it could not be accepted without much greater consideration than it is possible to give it on Report. If the Government were persuaded that there was here a substantial lacuna and defect, one would not have resort to the timetable aspect of the matter that I have thought it right to present. When one adds, that, with respect to the hon. Member, there is not very much to this anyhow, one is entitled to ask the House to share the view that as the matter has developed, the point has not really received the consideration that would warrant a change in the language of the Bill.

Mr. Graham Page: I am astonished that the Solicitor-General should take


the point that Report stage of a Bill is too late to present an Amendment. This is surely the stage when major Amendments are received.

The Solicitor-General: The hon. Gentleman cannot put that kind of proposition into my mouth. I said nothing of the kind. Of course Report stage is not too late to accept Amendments. I never heard such nonsense enunciated from either side of the House. The point is that one has to have regard to each particular case on the merits of the issue, the size of the point and consider it in relation to a report by a reform committee, and the manner in which these propositions come forward, and the order of time in which they came forward. When these matters are considered, and one thing is balanced with another, I am suggesting that it is not appropriate at this stage to make this change.

Mr. Graham Page: Nevertheless, the Solicitor-General made great play of the fact that the Law Society had been invited to give its comments on the Bill at an early stage. Indeed, he admitted that it had put forward the proposition which is included in my Amendment two days before the Committee stage began. He says that that is too late. If a body like the Law Society is invited to put forward Amendments to the Bill, if it is not to do so before the Committee stage, when must it do so? The Law Society has to consider these matters carefully in various committees. It brought forwards its proposition two days before the Committee stage and put it to the Government at that stage. It was not accepted by the Government and, therefore, it is brought forward as a formal, specific, quite clear Amendment at this stage.
1.0 a.m.
It is true that I expressed the opinion that the Committee was wrong. It was

wrong in assuming that this privilege existed and in assuming that whenever a patent agent is instructed pending High Court proceedings, the privilege will exist. That was what the Committee said. It said that there was no need for an Amendment to the law in this respect because the privilege existed.
In my practice, I have known many occasions when a client has consulted a patent agent first. When he has found that someone is infringing his rights in an invention, he has gone to a patent agent and asked advice about proceedings. He is not under an obligation to come to a solicitor at that stage. Sometimes he does not do so if he has been in touch with a patent agent before. If he does that, however, there will be no privilege in the communications between the client and the patent agent, and yet if he goes to the solicitor first and the solicitor takes him to the patent agent, privilege will exist. That is the anomaly which not only I, but the patent agents, want to overcome, and which the Law Society has put to the Government and wishes the Government to overcome by the Amendment.
The Solicitor-General has cast the Amendment aside by informing the House that it is too late a stage to deal with a minor Amendment of this sort. It may be minor, and such a situation may not occur more than once or twice a year, but it is an anomaly which there is opportunity to put right in the Bill. The House should put it right.

Amendment negatived.

Motion made, and Question, That the Bill be now read the Third time,put forthwith pursuant to Standing Order No. 55 (Third Reading),and agreed to.

Bill accordingly read the Third time and passed, with Amendments.

Orders of the Day — CIVIL AVIATION BILL [Lords]

Order read for resuming adjourned debate on Question [19th July], That the Bill be now read the Third time.

Question again proposed.

1.2 a.m.

Mr. R. J. Maxwell-Hyslop: I rose to speak a minute before the Third Reading was adjourned on Friday. I am glad to see that the Minister is just about to get some technical backing. I was about to explain to the House on Friday why it was necessary to have a full and complete—"full and proper" were the words used by the Minister's predecessor—Third Reading.
It was apparent from the form taken at the beginning of Third Reading that the Minister of State would have been happy to ditch completely the commitments made by his predecessor and allow the Bill to receive its Third Reading on Friday without having honoured the specific commitment given to Standing Committee G by his predecessor at c. 45 of the OFFICIAL REPORT of the Committee's proceedings.
In Committee, what was then Clause 7, but is now Clause 11, began to be subjected to scrutiny by the Committee. That is the Clause which enables the Board of Trade, with the approval of the Treasury, to make unlimited grants or loans to any person who is conducting one of a large number of activities. When the Minister of State was pressed on a number of very specific points he quite reasonably told the Committee that his policy thinking had not been advanced sufficiently far to give the Committee the information which it quite reasonably requested, and he gave a positive undertaking to give that information to the House on Third Reading.
What were the questions put to him? I think it is necessary to run through them. I have given notice in writing to the Minister that I wished him to honour the undertaking given by his predecessor. I gave him that notice as long ago as last Friday. I think that for the record it is necessary that we should be quite specific about what the questions were which were to be answered tonight by the Minister of State. The Minister has had ample opportunity to read the

OFFICIAL REPORT of the debates in Committee, so none of these questions can come to him new now. I shall quote from the OFFICIAL REPORT. I said:
First, who qualifies? This question has been raised by my hon. Friend the Member for Saffron Walden (Mr. Kirk) … Does the Board of Trade intend to lay down qualifying regulations, or does it intend to remain entirely passive dealing with individual applications on anad hoc basis? 
Then, a little later:
I therefore look forward to hearing from the Minister of State who qualifies for these various acts of public benevolence, what are the rules governing the granting of loans or the provision of grants; when and how will these rules be made known; and whether or not they will be retrospective…. Do these expenses have to be approved in advance by the Minister before a claim for a grant or loan can be made, or can the expenses be incurred and then the bread cast upon the waters in the hope that the Minister will decide to make a grant?
Now we come to a particularly important one:
Does the Minister's decision whether to make a grant or loan depend upon the merits of the individual case or upon the number of grants or loans which have already been made in the same financial year?"—[OFFICIAL REPORT,Standing Committee G, 16th May, 1968; c. 41–2.]
There is, of course, an important principle involved here.
The Minister of State said:
I do not propose to follow the advice of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and talk right through to the end of the sitting, but if he is in serious doubt about the purpose of the Clause and the amount of money involved, I will elaborate perhaps on Third Reading. I give an assurance to do so."—[OFFICIAL REPORT,Standing Committee G, 16th May, 1968; c. 45.]
So we look forward to hearing from the Minister what is the amount of money involved each year. In other words, what will the Department be budgeting for? Because without that Parliament cannot exercise proper financial control over the expenditure which is authorised in what is now Clause 11 and was then Clause 7. This is drawn so widely that this information does need to be given to the House. We do need to be told what will be the criteria which will decide whether the person referred to gets a grant or a loan; and, if a loan, what the terms of the loan will be.
I think it was perfectly proper for the Minister of State to ask us to postpone this to the Third Reading because, quite


obviously, this extraordinarily ill-prepared Bill had not reached the point where the Minister was able to give an honest answer to the Committee, but it is absolutely essential, if the Government are to retain any shreds of integrity, that, the Committee having ceased its examination at that point, in view of the undertaking given by the Minister, we should now have a full statement from the Minister covering these points.
We are now in the somewhat bizarre position of debating the Question, That the Bill be read the Third time, without the Minister concerned having made a speech in support of the Motion. We therefore have to put at considerable length and before hearing him speak the points which we hope that he will cover. Otherwise, we would exhaust our right to speak before knowing whether he had covered all the points which his predecessor undertook to cover. He has put the House in a very difficult position and it is incumbent upon him to cover all these points.
It is wrong that a consolidation Measure of this kind, containing financial provisions of unlimited potential, should go on the Statute Book without proper debate. With those few words on only one Clause, I look forward, however belatedly, to a full statement from the Minister of State along on those points.

1.11 a.m.

The Minister of State, Board of Trade (Mr. William Rodgers): This is the final stage of what is, by common consent, a very useful Bill, which has been much improved during its passage by the efforts of hon. Members on both sides. My own credit for this has been small, and I know that the House would wish me to pay tribute to my predecessor, who played an active part during many long hours in Committee and is responsible for much of what is now, I am sure, a very good Bill.
In case the House might inadvertently have been misled by the hon. Member for Tiverton (Mr. Maxwell-Hyslop), I should emphasise that the Bill has hardly been rushed through. It went to another place on 8th November last, went into Second Reading Committee here on 14th February, has been discussed in the House in all for over 24 hours, and started with 21 Clauses and has ended

with 28. I pay tribute to the hon. Member for Tiverton, who made over 80 separate contributions to those debates. So it can hardly be said that we have not had a full debate or that he himself has not had a good bite of the cherry.
When the Bill first went into Second Reading Committee, where Bills go which are supposed to be non-contentious, the chief Opposition spokesman said that the Committee generally welcomed the Bill and was disposed to recommend it to the House; thereafter, he and other hon. Members spent eight separate sessions deciding what was wrong with the Bill and how it could be made better. Therefore, at the end of Third Reading, I can say that we have considered it fully, and if everyone is not satisfied, that is only because no one is ever wholly satisfied. If the hon. Member for Tiverton feels at the end of the evening that I have not done justice to his pertinent and probing questions, his experience of the ways of the House will enable him to carry on the debate at his own convenience.
On Third Reading—I would have been happy had this gone on longer, but we took much longer on Report than anyone anticipated, with two hours on the first Clause—the hon. Member for Worthing (Mr. Higgins) raised some points of particular concern to him about traffic over his own constituency. As I said at the time, these are matters which are perhaps better dealt with in correspondence than in the House at this hour when we want to press on to further business.
We had a long debate on the new Clause dealing with noise, at the end of which I conceded what must be generally accepted, that the disturbance caused by aircraft noise is a major social problem and is likely to increase as aircraft become larger and traffic increases. I do not propose to go into the problem in more detail, except to remind the House that, apart from the measures which must essentially be regarded as palliatives— concerned with how aircraft land and take off, preferential runway utilisation, restrictions on the number of night jet movements—we are taking special steps to introduce a noise certification scheme, which we hope will, over a period, substantially reduce the noise from aircraft. In the interim, I am personally concerned


to ensure that the aircraft operating today, which will operate for many years ahead, can, through research, cause less noise.
The hon. Member for Tiverton raised a number of points about Clause 11, which is generally concerned with the development of airports policy. I regret that he is discontented. I would like to develop this matter in greater detail, but my reading of what was said by my predecessor in Committee does not lead me to believe that, even if he had had more time than I have, he would have proposed this moment for a discussion of all the detailed points the hon. Gentleman raised. However, if he wishes to go into the matter further, I will be happy to give him such answers as I can.
As the hon. Member for Tiverton said, the Bill consolidates many aspects of aviation policy. It is a good Bill and the House has welcomed it. The House will be glad to see it go on its way as a useful contribution, to which many hon. Members have, in part, contributed.

Question put and agreed to.

Bill accordingly read the Third time and passed, with Amendments.

Orders of the Day — THEFT BILL [Lords]

As amended (in the Standing Committee), considered.

Clause 1

BASIC DEFINITION OF THEFT

1.17 a.m.

The Under-Secretary of State for the Home Department (Mr. Elystan Morgan): I beg to move Amendment No. 1, in page 1, line 12, leave out 'four' and insert 'five'.
This Amendment is consequential on the inclusion in the Bill of Clause 6, which was added in Committee. The Amendment would substitute "five" for "four" in subsection (3), which contains the basic definition of "theft"—that is
… the intention of permanently depriving the other of it …
Subsection (3) applies Clauses 2 to 5 to the operation and interpretation of Clause 1. The Amendment ensures that

Clause 6 also applies for the purposes of that Clause.

Amendment agreed to.

Clause 5

"BELONGING TO ANOTHER"

Sir Peter Rawlinson: I beg to move Amendment No. 23, in page 3, line 24, leave out from first 'trust' to end of line 26.
The matter with which the Amendment is concerned was raised in Committee. In this Clause we have the definition of property belonging to another and some curious words in subsection (2). It is interesting to note that subsection (1) deals with
Property … belonging to any person having possession or control of it, or having in it any proprietary right or interest …
Subsection (2) deals with
… property subject to a trust …
Subsection (3) is concerned with the situation
Where a person receives property from or on account of another, and is under an obligation to the other to retain and deal with that property …
Subsection (5) is concerned with
Property of a corporation … belonging to the corporation …
They are all definitions. However, in the part of the Clause with which the Amendment is concerned, we read:
Where property is subject to a trust, the persons to whom it belongs shall be regarded as including any person having a right to enforce the trust …
My hon. Friends pointed out in Committee that this was muddled drafting. We still take that view. Although the Solicitor-General promised to look at the subject again, he has not tabled an Amendment to put the matter right. We see no reason why this provision should not be redrafted.

The Solicitor-General (Sir Arthur Irvine): I am glad to have the opportunity of dealing with this point which was raised by the hon. and learned Member for Solihull (Mr. Grieve) in Standing Committee. As I understood it, the anxiety that was felt was that the expression "defeat the trust" might have the effect of causing the offence of theft to extend to breaches of trust which were not criminal. I am satisfied after


careful inquiry that this anxiety is unfounded.
As the Bill stands, there has to be dishonest appropriation of property and an intention permanently to deprive before theft is constituted. Any conduct in relation to trust property, in order to amount to theft, would have to be conduct which would be theft if the property were not trust property. In the view that I take, this limits the ambit of the phrase "defeat the trust". Such difficulty as there is on the point would, in the Government's view, not be removed by resort to any other language. That is the outcome of our thinking upon this matter.

Sir John Foster: I cannot help but disagree with the Solicitor-General. The words which it is sought to omit are:
and an intention to defeat the trust shall be regarded accordingly as an intention to deprive of the property any person …
having a right to it.
Leaving aside the difficult English in that sentence, surely the intention to defeat the trust is part of the element of the offence. One has to see what the intention to defeat the trust means. In Committee I criticised the imagery of a battle between the alleged criminal and the trust. One can defeat the trust in many ways. The Solicitor-General says that there is a limitation in that one has got to have a dishonest intention to get hold of some property. But the words that we seek to omit state that defeating the trust
shall be regarded accordingly as an intention to deprive of the property any person having that right.
The wording is very cumbersome and it introduces an entirely new concept into English law, namely what is defeating the trust.
If "defeating the trust" is intended to be an element showing that there was a dishonest intention, then the words are not apt to do that at all because some minor attempt to break the trust might be regarded as an intention to deprive a person of the property even though without those words no criminal intention would have been proved. I therefore submit that these words should be omitted, for the Clause will work just as well without them.

Amendment negatived.

Clause 6

WITH THE INTENTION OF PERMANENTLY DEPRIVING THE OTHER OF IT

Mr. Elystan Morgan: I beg to move Amendment No. 2, in page 4, line 5, at end insert:
;and a borrowing or lending of it may amount to so treating it if, but only if, the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal".

Mr. Deputy Speaker: With this Amendment, the House can also consider Amendment No. 3.

Mr. Morgan: These are drafting Amendments. Their only effect is to transfer the proposition at the end of subsection (2) of the Clause, namely, that a borrowing or a lending cannot amount to treating the property as the borrower's or lender's own to dispose of regardless of the other's rights, to the end of subsection (1). There are also some necessary adjustments made to the opening words. It has been suggested to the Government that the proposition would come in more appropriately at the end of subsection (1), and the Government have accordingly drafted these Amendments.

Sir J. Foster: I do not think that the hon. Gentleman can get away with saying that it is a drafting Amendment; he must explain what it means. It is not, to my mind, a drafting amendment to take a cumbrous and obscure passage and move it from the end of one subsection to the end of another. That is not a drafting amendment.
I invite the House to look at the words. What, apparently, it means is that a borrowing or lending of the person who is accused of theft cannot amount to a permanent deprivation of the property unless the borrowing is for a period and—I underline the word "and"—in circumstances making it equivalent to an outright taking or disposal.
The first criticism is that the borrowing or lending should be able to amount to a permanent deprivation if it is for an unlimited period. It is very difficult to see why, if the person suspected of theft borrows or lends some property for an indeterminate period, say for a period determinable on condition, that should


not be equivalent to a borrowing or lending which equals a permanent deprivation of property.
What is made even more difficult by the moving of this passage from subsection (2) to subsection (1) is that, as well, the circumstances must make it equivalent to an outright taking or disposal, so that where the last sentences make it equivalent to outright taking or disposal those are not enough to make it a permanent deprivation unless it is for a period as well. It is difficult to see the logic of that. If there are circumstances making it equivalent to outright taking or disposal, I would have thought that was sufficient to make it a permanent deprivation according to Clause 6(1).
The hon. Gentleman has not explained why it is thought that the passage should be moved from subsection (2) to subsection (1). I quite appreciate why he has avoided that, since it would involve telling the House what it means. The circumstances which make it preferable to move it from one to the other must depend on what it means. With great respect to him, I think he is not in accordance with the tradition of the House in saying it is a drafting Amendment. It is nothing of the sort; it is this: a particular sub-sentence means so-and-so and because it means so-and-so, it is not apt for subsection (2), but because it means so-and-so it is apt for subsection (1). I would ask him to explain what it means and why it is more apt for subsection (1) than for subsection (2).

Mr. Morgan: I have been invited to explain the exact meaning of this passage. I would plead that this is a drafting Amendment in the sense that it neither adds to nor detracts from anything that was contained in the totality of the Clause when it was moved as a new Clause in Committee. In that respect I submit that it is a drafting Amendment and no more.
1.30 a.m.
Two changes are involved. First, the position is moved from subsection (2) to the end of subsection (1), where it more properly belongs, and then it is put in a positive rather than in a negative form. I am sure that the hon. and learned Gentleman and his colleagues will agree that, in effect, if the Amendment is carried

the Clause will read no differently from how it read on leaving the Committee. The meaning of the words, therefore, takes us rather wider than the Amendment itself, but I would say that the whole purpose of the Clause itself and of this proposition is to place beyond any doubt what has already been an established pattern of law for upwards of 150 years. It is a restatement of the law with regard to those cases which might not literally amount to a deprivation of the ownership, which had been so regarded from time to time.
The proposition covers cases where a person has borrowed property either with the full consent of the owner or without that consent, and where he has acted in such a way in relation to that property as to show clearly that he is thereby either actually or constructively assuming the position of the owner. It would cover the case, in particular, of the person who borrows a chattel, pledges it, and then, perhaps by spending the money he receives therefore, makes it impossible or unlikely for him to be able to redeem it—

Sir J. Foster: Would not that situation come within the Clause, because he would be pledging it, not for a period? Will the hon. Gentleman explain why it has to be for a period? In the circumstances in which one pledges a chattel, one does not do it for a period.

Mr. Morgan: I am afraid that I cannot agree with the hon. and learned Gentleman's proposition. Both the circumstances and the period, in the sense that by depriving himself of the likelihood that he would be able to redeem it, would amount to a permanent exclusion of the ability to regain that chattel and thereby to pass it back to its original owner.
The case which comes most readily to mind in this connection is that of a person borrowing, say, a season ticket. If he borrows it merely to keep it for any reason whatever as a piece of cardboard having an intrinsic value of a fraction of a penny, no offence can be committed under the Clause. But let us assume that he uses the ticket in order to gain admittance to a certain performance or series of performances—let us say that he uses it for nineteen of twenty performances. He has, by that act, used

the season ticket in a situation which shows that he is not any longer acting as a borrower but as aqua owner of the ticket. There is a series of settled cases on such a question, the circumstances and the period put together show quite clearly that to all intents and purposes there is an intention to deprive the owner permanently of the chattel.

Amendment agreed to.

Further Amendment made: No. 3, in page 4, line 12, leave out from 'rights' to end of line 14.—[Mr. Elystan Morgan.]

Clause 9

BURGLARY

Mr. Alexander W. Lyon: I beg to move Amendment No. 28, in page 5, line 2, leave out
'a term not exceeding fourteen years' and insert 'life'.

Mr. Speaker: With this Amendment we can consider Amendment No. 29, in line 4, leave out Clause 10.

Mr. Lyon: These two Amendments are linked, and the main Amendment is to delete Clause 10—Aggravated Burglary. It was with some surprise when I read the report of debates in another place and in Committee that I found this point had not been taken at any stage. The basis of the Bill is that there have been in the past far too many complicated and overlapping offences which ought to be reduced to a number of simply stated and clearly defined offences, with, perhaps, higher maximum penalties than had been the case previously for the offences from which the current offences will take their name in order that the judges can decide on the severity of the offence and apportion punishment accordingly.
As the Criminal Law Revision Committee said in its introductory paragraphs about the Bill:
The present different maximum penalties date from times when maximum sentences were passed much more commonly than they are now and when Parliament was much more willing to trust the discretion of the courts in sentencing.
We all know of the time when people were transported for quite simple and relatively innocuous cases of theft. Having followed that principle admirably in

the presentation of this excellent Bill, we come to Clause 10 when, for some reason which the Committee does not clearly spell out, it decided that in addition to the offence of burglary an offence of aggravated burglary is needed. It says that aggravated burglary should be simple burglary coupled with the possession of some offensive weapon. Note not the use of an offensive weapon but simply its possession. If a man commits a simple burglary but has in his pocket a knife, that knife may be sufficient to convict him of the more serious offence even if he never takes it out of his pocket and the occupant of the house is unaware that he ever had the weapon on him.
This is the kind of ludicrous situation there has been in the past where some feature has been present in the commission of the offence which was peripheral to the commission and had no effect on the mind of the person against whom the offence was committed yet which somehow or other makes it a more serious offence. Surely there should be an offence of burglarysimpliciter and the court should be allowed to determine in all the circumstances what is the appropriate sentence. Burglarysimpliciter in Clause 9 should have the maximum penalty of imprisonment for life and thereafter it should be for the court to determine the sentence. It is unnecessary to put in Clause 10 with aggravating features. I am carried in this conviction because, as the Committee pointed out, burglary has hitherto carried a maximum penalty of imprisonment for life. The new offence of burglary as defined in the Bill carries a reduced maximum sentence. It would, therefore, not be inappropriate to increase the maximum sentence to imprisonment for life. If that were done, there would be no virtue in retaining the additional offence of aggravated burglary, unless it be said that somehow or other the higher penalty is a deterrent to a burglar carrying an offensive weapon.
I see my hon. Friend the Under-Secre-tary nodding. I should have thought that we had now reached the stage where we could say that burglars do not commit offences carrying in their minds the maximum penalties to determine what are the deterrent qualities of punishment. I do not want to go into the whole question of capital punishment. It may be


that where there is a fixed penalty, such as there is for murder, it is a matter which a potential criminal will carry in his mind. Where there is simply a maximum penalty, and where the criminal fraternity knows as well as any member of the bar present that the maximum penalty is rarely imposed—in almost every single case the punishment imposed is less than the maximum but will vary in length according to the way in which the offence was committed—it must be inappropriate to suggest that there is some deterrent quality in fixing a higher maximum penalty in a different kind of case.
Take, for instance, a case of simple burglary committed in such a way as to terrify the occupants of a house but when no offensive weapon is carried. Any judge would regard that as a more serious offence than a case of burglary where the house was unoccupied but where the burglar was carrying a gun. The very fact that some violence had been offered or offence caused to people who were on the premises—they might have been tied up or gagged—makes it a much more serious offence in the eyes of the court than the peripheral fact that a man was carrying an offensive weapon when committing burglary on an unoccupied house. The result of Clause 10 would be that for that simple case of burglary a criminal would receive a higher offence than if he had committed the other offence, which carries in theory a higher maximum penalty. No judge looks at the maximum penalty, where the maximum is in the region of 14 years or life, to determine what the sentence should be. He simply looks at the facts. The maximum penalty of 14 years is sufficiently high in any case for most ranges of offence. It is only in the exceptional case that the maximum penalty would be used.
It is illogical and unfortunate that the Committee, which was so revolutionary in its recommendations over such a wide area, should have been so pusillanimous on this issue. It said in paragraph 80 of its Report:
Although we are in general opposed to splitting up offences, we regard it as justified in this case.
However, the Committee did not go on to determine why it should be "justified

in this case". The Committee accepts that the arrangement would be free from the disadvantages of the present system of splitting up offences, because there would be no overlap, since simple burglary would have to be proved first and then the aggravating features added to it. The Committee finishes its findings on this matter in this way:
If the possession cannot be proved, the accused can be convicted of simple burglary.
I cannot see anything in the Bill which says that a person can be convicted of a lesser offence if he is charged with the more serious offence and the aggravating features are not proved to be present. If there is nothing in the Bill to say that a person can be convicted of a lesser offence, is it simply a rule of practice that a person can be dealt with in this way?

Sir J. Foster: The hon. Gentleman gave an instance of a man with an offensive weapon who put people in a house in fear. Would not that be robbery under Clause 8, because in order to steal the man puts a person in fear?

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Mr. Lyon: I was coming to that point. I agree that it would be robbery, but in order to be convicted of robbery he would have to be charged with it. In the indictment there would have to be two counts, one of burglary and one, either alternative or supplementary, of robbery, and the ingredients of the offence would have to be spelt out. Why go to the trouble? Why not simply charge the man with burglary and allow the court to take into consideration all the facts of the case? If there is violence or a threat of violence, or possession of arms or the use of arms, all this can be taken into account in deciding the appropriate sentence.
The fact that reference is made to robbery strengthens the case, because whereas before we had robberysimpliciter, robbery with violence or robbery with aggravation we now have the single crime of robbery, for the obvious and simple reason that if there is a maximum sentence of life imprisonment one can deal with any aggravation that is caused by an appropriate sentence. Why not do that with burglary? Instead of having burglary and burglary with aggravation why not burglary with a


maximum sentence of life imprisonment? Any aggravation can be dealt with within the particular offence. I believe that the Committee has been illogical on this, simply because there was a suggestion of using firearms. Everybody accepts that that is a particularly aggravating feature of any crime, but this is not likely to lessen the use of firearms. It simply adds a complication that need not be there.

Sir P. Rawlinson: I offer the Minister support, if it is needed, in maintaining the position as it is. I hope that he will ignore the blandishments of his hon. Friend the Member for York (Mr. Alexander W. Lyon). In the Bill there are theft, stealing, robbery, burglary and aggravated burglary, and it is right that there should be the extra offence of aggravated burglary. I am not so confident as the hon. Gentleman about the ignorance of those who engage in the full-time practice of crime. It is right that there should be the distinction between aggravated burglary by the burglar who is armed, and burglary by the cat thief who breaks through a window, takes something and goes. Where a person goes to a house with a firearm, explosives, or whatever it may be, we should spell out in the Bill that that is an aggravated offence, and should carry an extra penalty. Therefore, I hope that the Minister will not accept the Amendments but will retain the offence of aggravated burglary.

Mr. Edward Lyons: I support my hon. Friend the Member for York (Mr. Alexander W. Lyon) in the interests of further simplifying the law, to reduce the burden on judges and recorders in explaining the law to jurors and to reduce the burden on jurors, making the law simpler for them to understand and thus making it easier for them to arrive at sensible verdicts.
Under Clause 10 one must explain to a jury what burglary is, and go on to explain aggravated burglary, telling them that if they do not find aggravated burglary they can bring in a lesser verdict of burglary. All of that is unnecessary. There is no reason why there should not be one charge of burglary, with the court having discretion as to the proper sentence.
If a man goes into a house which is unoccupied with the intention of com-

mitting burglary and has in his pocket a knife which he habitually carries, he may be charged with aggravated burglary and is eligible for life imprisonment. On the other hand, supposing he goes empty-handed into a house where he knows that there is a woman upstairs, and that woman hears him moving about, she will be terrified. It may affect her for life. But he is not guilty of robbery because, unless he intends to frighten the woman, to draw himself to her attention, there can be no offence of robbery. If he goes into a house determined to commit a burglary, not caring whether the house is occupied or not, he is simply guilty of that burglary and is eligible for a lesser sentence. Yet most people would consider that the second offence was far more serious than the first. We are creating artificial divisions in Clauses 9 and 10 which are quite unnecessary, making the law unnecessarily complex. I therefore feel that the Amendment is worthy of support.

Sir J. Foster: The important point here is that it is for the jury to decide whether the criminal is armed or not and not for the judge. There may be a disputed question of fact as to whether it was an aggravated burglary and it is wrong for the judge to have to make up his mind as to a question of fact. It would seem unfair that a simple burglar should get imprisonment for life even if the woman upstairs whom he did not know was there was frightened.

Mr. Elystan Morgan: I am grateful to hon. and learned Members opposite for their comments and the ease with which they have been able to transcend party loyalties and attitudes in dealing with the Bill.
The approach of the Committee in preparing the draft Bill was to reduce the number of different offences with their varying penalties. This has been done particularly in the case of theft, a single offence with a ten-year penalty now replacing a complex of existing offences and penalties. But the Committee did not think it right to make such a simplification of the offences covered by Clauses 9 and 10, and the Government agree.
The offences of burglary and aggravated burglary in these Clauses replace a


complicated group of offences of breaking in and out of buildings under Sections 24 to 27 of the Larceny Act, 1916, for which the maximum penalties range from seven years to life. Fourteen years is the present general maximum penalty under Section 26 of the 1916 Act for breaking and entering a building other than a place of divine worship or dwelling house and committing an arrestable offence in it.
In the Committee's view, expressed in paragraph 74, fourteen years is the right maximum for ordinary burglary but for aggravated burglary, which could be a very frightening offence which might lead to loss of life, a maximum of life imprisonment was necessary. While the Committee was in general opposed to the splitting up of offences—a view expressed in paragraph 80—it considered that it was justified in this case.
My hon. Friend the Member for York (Mr. Alexander W. Lyon) made the point that there might be difficulties about what might turn out to be a simple burglary if a person was charged with an offence under Clause 10 and with no other offence. The power to convict of simple burglary a person charged with aggravated burglary is contained in Section 6 of the Criminal Law Act, 1967. It is a general provision applying to all cases where the lesser offence is included in the greater. In addition, I should have thought that the very use of the word "aggravated" made it clear that there was such a power.
The Government see no reason to depart from the Committee's conclusion in this connection. Ordinary burglary could easily include some quite minor offences; for example, trespassing in a building with intent to steal but without stealing, or entering as a trespasser with intent to do some minor malicious damage. I maintain that a maximum penalty of life imprisonment would be wholly disproportionate for this sort of conduct. Moreover, the Criminal Law Revision Committee did not think that
 a sentence of more than 14 years' imprisonment would ever be appropriate, even in the worst cases, for ordinary burglary".

Mr. Speaker: Does the hon. Member wish to divide the House?

Mr. Alexander W. Lyon: No, Mr. Speaker. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 12

TAKING MOTOR VEHICLE OR OTHER CONVEYANCE WITHOUT AUTHORITY

Mr. R. Gresham Cooke: I beg to move Amendment No. 25, in page 6, line 8, at end insert 'or vessel'.

Mr. Speaker: With this Amendment, I have suggested that we take Amendment No. 26, in page 6, line 9, at end insert 'or vessel'.

Mr. Gresham Cooke: The parent of Clause 12 was Section 28 of the Road Traffic Act, 1930, which made it an offence to take or drive away a motor vehicle without the owner's consent. When that provision was introduced by the Labour Government of 1930, it was clearly understood by everybody, police and public alike. Two years ago, I was concerned about the taking away of yachts, boats and other vessels, and I introduced the Vessels Protection Bill which was on lines similar to those of Section 28 of the 1930 Act, but dealing with vessels instead of motor vehicles. It received the Royal Assent last year. That Act, too, was clearly understood by the public and the yachting fraternity generally. It was widely mentioned in the yachting Press and the police have said that it has been a useful and clear Measure.
Clause 12 makes it an offence to take away any conveyance, without any mention of vessels, yachts or boats, and this word "conveyance" may confuse the public who will not think that it covers a vessel. The public will only read that the Vessels Protection Act has been repealed by the Bill, and the word "conveyance" will not give the public the feeling that it covers a motor vehicle, or a vessel, or a hovercraft, or anything else. None of the 12 meanings of "conveyance" in the Shorter Oxford Dictionary mentions a vessel.
The Government, too, are extremely confused by the use of the word "conveyance". In Committee on the Hovercraft Bill, I tried to insert the word


"conveyance" into the definition of a hovercraft, saying that the word was used in the Theft Bill and that we should bring the two Bills into line. However, the Parliamentary Secretary to the Board of Trade, the hon. Lady the Member for Exeter (Mrs. Gwyneth Dunwoody) turned down my suggestion, among other reasons, because:
If one were wishing to be facetious, one might inquire whether 'conveyance' is intended to refer to an instrument under seal transferring the title of real property. We must take the words as meaning what we believe them to mean in this context."—[OFFICIAL REPORT,Standing Committee D, 27th June, 1968; c. 109.]
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That is what the public probably do think the word "conveyance" means. I suggest that the word "vessel" should be put back into the Clause to clarify it and make it clear that it refers to yachts and boats as well as what the public means by the word "conveyance." Besides being a legal point this is a public relations point. Whatever may be the result of my Amendment the Home Secretary should, in his circulars and instructions to police, and in Press notices, make it clear that the word "conveyance" includes all kinds of conveyance, motor vehicles, hovercraft, vessels and all the rest of it.

Mr. Elystan Morgan: It is my contention that there is no substance in the argument that vessels are omitted from Clause 12. Subsection (7)(a) says that the offence under the Bill could apply to:
… any conveyance constructed or adapted for the carriage of a person or persons whether by land, water or air.
That point is clearly covered.
I would submit that the hon. Gentleman's second argument, about the felicity or otherwise of the use of the term "conveyance" in substitution for the word "vessel" has little merit. There can never be any real danger of misunderstanding or uncertainty in this direction, because the term is accompanied by its own specific and clear definition. It matters not whether the object referred to is called a "vehicle", "conveyance" or "X", because whatever its name, the category is clearly defined.
When the Road Traffic Act, 1930 was being drafted, and indeed the 1903 Road

Traffic Act, from which the original term was taken, the range of vehicles was very small. Now we are in the age of the hovercraft, and perhaps in the next few decades all manner of different forms of vehicles and conveyances will be developed. It is very necessary to devise a term that will be an adequate description to encompass them all. The point about publicising that this applies to "conveyances" in the air, on land or on or beneath the sea I am prepared to consider sympathetically.

Mr. Gresham Cooke: In the light of the Under-Secretary's explanation, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 13

ABSTRACTING OF ELECTRICITY

Amendment made: No. 4, in page 7, line 1, at end insert 'dishonestly'.— [Mr. Elystan Morgan.]

Clause 15

OBTAINING PROPERTY BY DECEPTION

Mr. Elystan Morgan: I beg to move Amendment No. 5, in line 36, at end insert:
(3) Section 6 above shall apply for purposes of this section, with the necessary adaptation of the reference to appropriating, as it applies for purposes of section 1.
This Amendment is consequential on the insertion in the Bill, in Committee, of Clause 6—the Clause which partially defines the words
with the intention of permanently depriving the other of it.
As it stands, Clause 6 applies only for the purposes of Clause 1, but clearly it should now apply both to Clause 1 and Clause 15.

Amendment agreed to.

Clause 16

OBTAINING PECUNIARY ADVANTAGE BY DECEPTION

Sir Eric Errington: I beg to move Amendment No. 6, in page 7, line 42, after "advantage", insert:
or the possession or control of any property belonging to another".


One notes with interest in regard to this matter that the idea of law reform legislation is to produce simplicity. Whether or not I could do that, I should indicate that the reason for the Amendment is to deal with the situation which arises in connection with hire-purchase transactions.
The case of Reginav. F. W. Garlick in 1958 established clearly, according to Mr. Justice Havers' judgment, that a hire-purchase agreement which was entered into by a false representation was not incurring a debt or liability obtaining credit. That was subsequently confirmed in the 1966 case of Reginav. Inman.
The question of hire purchase was referred to at c. 70 of the OFFICIAL REPORT of the Standing Committee but it was not pursued. The effect of my Amendment is to deal with the case of a person who by deception is able to obtain the use of property, which I do not think is covered by either Clause 15 or Clause 16. I do no know whether it is necessary for me to emphasise the importance of this matter from the point of view of ensuring that the securing of property by deception under hire purchase is a matter of considerable moment in these days when a great many transactions take place by hire purchase. Even simple hire of property may be affected by the Amendment.
Without my Amendment, Clause 16 provides only for the three types of special transaction dealt with in paragraphs (a), (b) and (c) of subsection (2), so that without the Amendment the matter is not covered by the Clause. I understand that there have been discussions between the Home Office advisers and that it was not considered appropriate to add another paragraph to subsection (2) to deal specifically with hire purchase. It follows that as the Bill stands, one is thrown back to subsections (1) and (2) of Clause 15, but even that does not cover the position because of the words
 with the intention of permanently depriving the other of it
in subsection (1).
It might be argued that in the frequent cases concerning motor cars, there would be the protection of Clause 12. That deals only with motor vehicles, which

are by no means the only form of property which might be used and possession of which had been obtained under a hire-purchase contract. The complications of establishing "without lawful authority" under a hire-purchase agreement would be formidable.
The full legal point should be clearly dealt with in an important matter of this kind. It is dealt with by my Amendment, which covers the case of a person who obtains property by a hire-purchase document which has been made possible by deception and then, under threat of prosecution, says that he will return it, having had the use of it for a period.
In a hire-purchase transaction, Clause 15 would not provide secure means of prosecuting somebody who could establish that what he did was not intended permanently to deprive of its goods a hire-purchase company which is the owner of the property.
With regard to Clause 6(1), that provides that when a person appropriates property without meaning that the owner shall permanently lose it, he is regarded as having the intention of depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other's right. But this suggests that the disposal should be without regard to the other's rights, and I think it might easily be said by anybody charged with an offence of this kind, his disposal at the end of the period when he was using the property, was that he intended to have regard to the rights contained in the hire-purchase agreement. Even if his position did come under Clause 15 there would be an anomalous position in regard to the punishment which, under Clause 15, is a maximum of 10 years, while under Clause 16 it would be five years. Surely there should not be such a difference of five years if we are dealing on the one hand with a bank overdraft and on the other the use of property which was obtained by deception under a hire-purchase agreement.
I believe that the method of my Amendment is the best way of dealing with this potential loophole in the law. It suffices for me to say that I think there is that potential loophole which ought to be dealt with in not allowing people by deception to obtain the use of property which at the end of a period of time they propose to return. If the


Government consider this case is covered, I should be glad to know how it is suggested that it is covered, and if it is not covered I am confident that it should be, either by my Amendment or otherwise.

Mr. Elystan Morgan: This Amendment is both undesirable and misplaced in Clause 16. That Clause is concerned with deception which led to the obtaining of pecuniary advantage as defined in subsection (2) without obtaining the property, but dishonestly obtaining property by deception is dealt with in Clause 15. The Amendment confuses completely the pattern of offences under the Bill by adding to Clause 16 a further offence of dishonestly obtaining possession or control of property belonging to another punishable with five years' imprisonment instead of the 10 years' provided by Clause 15 and without the ingredient in Clause 15 of the intention permanently to deprive the owner of the property. In short, if the Amendment were carried the Bill would contain two separate offences in Clauses 15 and 16 of dishonestly obtaining property by deception, one requiring the intention permanently to deprive the owner, and the other, albeit with a lesser penalty, without requiring such intention.
In earlier debates the House has decided that the Bill should not extend theft to dishonest borrowing or create a new offence of dishonest borrowing.

Sir E. Errington: This is not borrowing. I would like to emphasise that. Even though the House did decide that dishonest borrowing should not come within the Bill, this Amendment has nothing to do with borrowing.

Mr. Morgan: The hon. Gentleman did not have the advantage of being a Member of the Committee when this matter was discussed very fully. When challenged, if that is the appropriate term for such a well-ordered, co-operative Committee, hon. and learned Gentlemen on the other side said that what they meant in each case by what they would wish to see categorised as unlawful borrowing was any borrowing in respect of which the consent of the owner had not been obtained. It would be indefensible to create a general offence of obtaining that temporary possession of property by deception when it is not to be criminal simply to take the property without the

owner's consent for a temporary purpose. If that Amendment were accepted it would be a criminal offence, assuming dishonesty, to trick someone into lending something.
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The Amendment is understood to have been proposed because of fears that the Bill as drafted may not adequately cover hire or hire purchase agreements obtained by deception. The hon. Member referred to this. The Government consider, however, that the Bill adequately covers any conduct by a person obtaining such an agreement which could be criminal. If when the agreement is obtained, deception is used with a dishonest intention permanently to deprive the owner of the property, there will be an offence of dishonestly obtaining the property under Clause 15 (1) or an attempt to commit such an offence.
It is true that there might, in some cases, be difficulty in proving that the deceptions was used with an intention permanently to deprive the owner but the difficulty would be no greater than under the existing law of false pretences, where an intention permanently to deprive has to be shown. It would often be evident from the conduct of the person obtaining the property that his intention was permanently to deprive the owner of it, for example if he sold it or abandoned it in circumstances when it was unlikely to be returned to the owner.
Similarly, the Amendment is unnecessary to deal with cases in the hire purchase field where a pecuniary advantage is obtained by deception. Under Clause 16(2,a) a pecuniary advantage is to be regarded as obtained for a person in any case where
any debt or charge for which he makes himself liable or is or may become liable (including one not legally enforceable) is reduced or in whole or in part evaded or deferred ".
Accordingly, it would be an offence under the Clause to use a dishonest deception to obtain property on hire or hire purchase on more favourable terms than would have been the case but for the deception.
It has been pressed by the hon. Member that the Bill should make criminal the dishonest obtaining of a hire or hire purchase contract by deception even if


this does not result in a reduction or evasion of charges or in the hirer making away with the property. In the Government's view, this would be wrong.
The Bill as introduced in another place contained a provision which was then Clause 12(3) of the Criminal Law Revision Committee's draft Bill, which would have made it an offence to obtain any contract by dishonest deception. This, however, was removed and replaced by the present Clause 16 after criticism that such conduct should in general be left to the civil law. It would indeed be contrary to the present scheme of the Bill to single out hire or hire purchase contracts for such exceptional treatment.

Sir E. Errington: Before the Undersecretary sits down. Is it, then, the Government's view that Clause 15, in addition to Clause 6, creates an offence which would deal with the case of someone who, by deception, obtains a hire purchase contract and uses the subject of the contract?

Mr. Morgan: If a person uses that hire purchase contract as a subterfuge for gaining possession of the property, Clause 15(2) says:
For purposes of this section a person is to be treated as obtaining property if he obtains ownership, possession or control of it …
Clearly, if he disposed of it by dumping it, selling it or trying to sell it, there would be an offence of the theft as defined in Clause 1. I do not think that Clause 6 comes into this situation. There might be a few cases in which it would be claimed that he had borrowed it under such an agreement, but either there would be a taking, a theft, under Clause 1, or no such offence would have been committed, in which case there would be for the finance company only the civil remedies.

Sir E. Errington: Although I will not divide the House, I will not withdraw the Amendment.

Amendment negatived.

Sir P. Rawlinson: I beg to move Amendment No. 24, in page 8, line 13, after "employment", insert:
or to obtain the services of another person".
Subsection (2)(c) deals with a false reference enabling a person

 … to earn remuneration or greater remuneration in an office or employment … ".
Should we not state the obverse; in other words, cover the position if, by a false reference, a person obtains the services of another person? I merely pose the question. Perhaps this issue is already covered by the Bill.

The Solicitor General: The Amendment is similar in effect to that of a new Clause which the hon. and learned Member for Northwich (Sir J. Foster) moved in Committee and which was designed to make the dishonest obtaining of valuable services an offence. After arguments against that proposal were adduced, that new Clause was withdrawn.
During the debate in Committee on that new Clause the hon. and learned Member for Solihull (Mr. Grieve) referred to a possible case of a person who helped a man with his work—for example, accounting—without payment but in return for training, before discovering that the employer was not what he held himself out to be. In such a case there would be no evasion of a payment due, since what would have been offered would be the obtaining of a professional qualification which would not have been obtained in the circumstances.
I undertook to look into the question of whether this would be a pecuniary advantage within the meaning of the Clause, and probably the hon. and learned Member for Solihull had this case mainly in mind when he tabled the Amendment which the right hon. and learned Member for Epsom (Sir P. Rawlinson) has moved.
The Government's view is that the dishonest obtaining is adequately covered by the Bill. Where actual property—for example, a meal in a restaurant—is obtained, there will be an offence under Clause 15. Where the deception is used to get work done without an obtaining of property there will, generally speaking, be an offence under Clause 16(2)(a). Under that subsection a person will commit an offence if, by deception, he dishonestly evades or defers, or enables another to evade or defer, in whole or in part, any debt or charge for which he makes himself liable or is or may become liable, or where the deception results in the debt or charge being reduced. This provision will cover the dishonest obtaining of services by deception where the object is to evade, defer or reduce the


charge that should be paid, and appears to cover those types of fraudulent obtaining of services that should be criminal.
The case to which the hon. and learned Member for Solihull referred in Committee would not be covered by Clause 16 because there is no question of payment being evaded or deferred or a charge being reduced. But there is no reason to think that such a case would be other than rare, if not entirely hypothetical, and we do not think that it is necessary to extend the Bill to cover it.
But if this case is to be covered, so, too, presumably should other types of obtaining non-pecuniary advantage by deception, and this would be to extend the boundaries of the criminal law well beyond what has been criminal in the existing law. Indeed, if passed, the Amendment would have the effect that anyone who was persuaded by deception to accept or remain in a job with a false promise of better prospects of any kind would come within the scope of the Clause. There is no reason to believe that there is any substantial mischief with which the Clause fails to deal and it would be most undesirable to extend it in the manner proposed. As I say, I am glad to have had the opportunity of dealing further with the point that was raised. I recommend that this Amendment should be resisted.

Sir P. Rawlinson: I beg to ask leave to withdraw the Amendment.

Amendment, by leave withdrawn.

Clause 31

EFFECT ON CIVIL PROCEEDINGS AND RIGHTS

Mr. Elystan Morgan: I beg to move Amendment No. 7, in page 16, line 39, leave out 'him' and insert:
'that person or the wife or husband of that person'.

Mr. Speaker: With this Amendment we are also taking Amendments 8, 9 and 10.

Mr. Morgan: The effect of the first two Amendments is that the restriction already existing in the subsection on the privilege against self-incrimination in civil proceedings would extend to the privilege against incriminating a spouse. Whether

a witness has a privilege of refusing to answer a question on the ground that this would incriminate his spouse is uncertain, but Clause 14(1)(b) of the Civil Evidence Bill gives this privilege.
Correspondingly the third Amendment makes an answer given in civil proceedings to which the subsection relates inadmissible in criminal proceedings against the spouse of a person who is giving the answer, as well as in such proceedings against such person himself.
The Clause was concerned only with the incriminating of the person making the statement or admission. The Amendments widen the subsection, so that the person and his spouse are identified for these purposes as in Clause 14(3) of the Civil Evidence Bill.

Amendment agreed to.

Further Amendments made: No. 8, in page 16, line 40, leave out 'him' and insert 'that person'.

No. 9, in page 17, leave out lines 1 to 3 and insert:
'in answering a question put or complying with an order made as aforesaid shall, in proceedings for an offence under this Act, be admissible in evidence against that person or (unless they married after the making of the statement or admission) against the wife or husband of that person'.—[Mr. Elystan Morgan.]

Orders of the Day — Schedule 2

MISCELLANEOUS AND CONSEQUENTIAL AMENDMENTS

Amendment made: No. 10, in page 25, line 15, column 2, leave out from 'words' to '"an 'in line 17 and insert:
' following "against that person" there shall be substituted the words "or (unless they married after the making of the statement or admission) against the wife or husband of that person in any proceeding in respect of.— [Mr. Elystan Morgan.]

Orders of the Day — Schedule 3

REPEALS

Mr. Elystan Morgan: I beg to move Amendment No. 11, in page 27, leave out lines 29 and 30.

Mr. Speaker: It is suggested that with this Amendment we take Amendments Nos. 12, 16, 18, 21 and 22.

Mr. Morgan: These Amendments respectively delete from Schedule 3 certain repeals of existing enactments. The first Amendment deletes the repeal of Section 12 of the Trade Union Act, 1871. The second Amendment deletes the consequential repeal of Section 5 of the Trade Union Act Amendment Act, 1876. It also deletes the repeal of Section 87(3), (4) and (5) of the Friendly Societies Act, 1896.
The next Amendment deletes the consequential repeal of Section 9 of the Friendly Societies Act, 1908 which added a proviso in Section 87(3) of the 1896 Act. The second limb of the third Amendment deletes the repeal of Section 111 of the Building Societies Act, 1962, and Amendment 18 deletes the repeal of Sections 64 and 66(1)(a) of the Industrial and Provident Societies Act, 1965.
The provisions in question concern offences in relation to friendly societies, trade unions and building societies. They create offences of obtaining by false representation any moneys, securities, books, etc. of a society, or having such moneys or withholding or misapplying them for an unauthorised purpose. Their repeal was originally included in the Bill on the ground that the offences were superseded by the offence of theft.
The Government have, on reflection, decided that it would be better to preserve the provisions because they provide for a convenient summary offence, and also because they provide a summary procedure whereby societies may recover their property. In the case of the Friendly Societies Act, 1896 and the Industrial and Provident Societies Act, 1965 it is possible to recover property where it is proved to have been taken but without fraudulent intent, and where there is no conviction. Accordingly these Amendments would preserve the provisions mentioned above.

2.30 a.m.

Sir P. Rawlinson: The reasons given by the Parliamentary Secretary for these Amendments, strange as they seemed at first sight, are sound and correct. A total of approximately 72 Government Amendments have been made to the Bill in the course of its passage through the other place and in this House. When the Bill first came to be amended it was suggested by the Lord Chancellor that it was almost unnecessary to amend it. This

shows how necessary it is to examine carefully Bills such as this which are concerned with the criminal law. This has been done successfully, not least in these last Amendments which I think, on reflection, are accurate and sensible and should be supported.

Amendment agreed to.

Further Amendment made: No. 12, in page 28, leave out lines 17 and 18.— [Mr. Elystan Morgan.]

Mr. Elystan Morgan: I beg to move Amendment No. 13, in page 29, leave out lines 10 to 13.

Mr. Deputy Speaker: With this Amendment we can take Amendments Nos. 14, 17, 20, 31 and 16.

Mr. Morgan: The principle of these Amendments is exactly the same as in the earlier group of Amendments dealt with. These deal with the Building Societies Act, 1962, the Coal Mining (Subsidence) Act, 1957, the Diseases of Animals Act, 1950, the Agriculture Act, 1937, the Agriculture Act, 1957, the Horticulture Act, 1960, and the Agriculture and Horticulture Act, 1964. Again, on reflection, there would appear to be minimal advantages in not repealing the provisions referred to. In most of these cases the already existing offences cover rather wider ground than does Clause 15 of the Bill. Furthermore, it might not always be easy to prove a dishonest intent, as would be required if only the offences in the Bill were available.
The Amendments accordingly preserve the existing offences only in so far as they are summary offences. It is not considered necessary, having regard to the other provisions of the Bill, to retain the offence under the Horticulture and Agriculture Act, 1964, as an indictable offence.

Sir John Foster: For the sake of HANSARD I think the hon. Gentleman slipped up. He said there would be minimal advantages in not repealing. What he meant was that there would be minimal advantages in repealing.

Mr. Morgan: Minimal advantages in not repealing as the Bill stands at the moment, thereby preserving the offences as they are set out in the various Acts at the moment.

Amendment agreed to.

Further amendments made: No. 30, in page 30, leave out lines 3 and 4.

No. 14, in page 30, line 5, column 3, leave out 'Section 7(1)'.

No. 31, in page 30, leave out lines 25 to 28.

No. 16, in page 30, leave out lines 34 to 37.

No. 17, in page 30, line 39, column 3, leave out from 'the' to 'onwards' in line 40 and insert 'words
or on conviction on indictment"'.

No. 18, in page 30, leave out lines 41 and 42.—[Mr. Elystan Morgan.]

Mr. Elystan Morgan: I beg to move Amendment No. 27, in

line 42, at end insert:

1966 c. 32
The Selective Employment Payments Act 1966.
Section 8(2)(a), (b) and (d) and (ii).


1966 c. 34
The Industrial Development Act 1966.
Section 9.


1967 c. 1
The Land Com-mission Act 1967.
Section 8l(5)(a), Section 93.


1967 c. 9
The General Rate Act 1967.
Section 49(8).

The same principle as I mentioned in relation to the two groups of Amendments earlier dealt with applies here.

Amendment agreed to.

Further Amendments made: No. 20, in page 30, line 44, at end insert:

1967 c. 22 The Agriculture Act 1767 Section 69(1)(ii).

No. 21, in page 32, leave out lines 17 and 18.

No. 22, in page 32, leave out lines 36 and 37.—[Mr. Elystan Morgan.]

Motion made, and Question, That the Bill be now read the Third time,put forthwith pursuant to Standing Order No. 55 (Third Reading),and agreed to.

Bill accordingly read the Third time, and passed, with Amendments.

Motion made, and Question, That the proceedings of this day's sitting be suspended—[Mr. Concannon]—put forthwith, pursuant to Order [12th December] (Sittings of the House)and agreed to.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Concannon.]

Debate arising—

The debate having been concluded, the Motion for the Adjournment of the House lapsed, without Question put.

Mr. SPEAKERsuspended the sitting of the House at twenty-five minutes to Three o'clock a.m. till Ten o'clock this day, pursuant to Order.